AUGUSTA (AP) – A state advisory panel updated its forecast for the Maine economy on Tuesday, expressing noticeable pessimism even as anti-recession initiatives on the federal level got under way.

The Consensus Economic Forecasting Commission scaled back its 2008 prediction for job growth from 0.3 percent to zero and dropped its anticipated growth estimate for personal income for the year from 4.4 percent to 3.5 percent.

The new forecast appears to make it harder for a second panel to avoid a new reduction in state revenue projections in its March 1 report.

A new revenue projection cut, in turn, would make it harder for Gov. John Baldacci and the Legislature to bring the General Fund budget back into balance.

Following the commission’s morning deliberations, panel chairman Charles Colgan of the University of Southern Maine told the Legislature’s Appropriations Committee a national recession, were it to occur, would not likely be deep or prolonged or impose a large impact on Maine.

Answering questions from lawmakers inquiring about ways the state might augment federal efforts to stimulate the economy, Colgan was reserved.

“The state just doesn’t have the same kind of fiscal policy leverage,” he told lawmakers.

The forecasting panel met after the Federal Reserve announced a rare inter-meeting rate cut of three-quarters of a percentage point.

Earlier this month in Maine, administration officials outlined Gov. John Baldacci’s plans to trim social programs in covering a $95 million revenue shortfall and meeting other unanticipated costs, such as higher than expected fuel bills.

In a two-year General Fund budget of $6.3 billion, a $95 million gap is relatively small but is regarded by the Baldacci administration and lawmakers as a major challenge.

Moreover, there is widespread belief at the State House that General Fund revenue trends will probably deteriorate further and be reflected in updated projections when the Revenue Forecasting Committee meets late next month.

A supplemental budget package outlined by Baldacci would not raise taxes or fees or touch rainy day reserves in the Budget Stabilization Fund.

Officials said about $40 million in savings to be applied against the revenue shortfall would come from cutbacks in human services, with a focus on reducing benefits to people whose incomes are too high to qualify for Medicaid.

Baldacci’s hands-off stance on using rainy day funds to bridge the budget gap appears to leave room for adjustment if General Fund revenue estimates are reduced further.

State reserves stand at around $160 million. The $6.3 billion biennial budget covers the two years that began July 1.

AP-ES-01-22-08 1446EST