Crunch time.

Like many households and businesses, the state is experiencing some extraordinary problems due to the recession. Maine’s revenue picture has turned from bleak to dire.

With the two-year shortfall projected at north of $400 million, there’s no question that big changes are on the way.

The governor has proposed some painful but necessary budget cuts.

He is seeking a $73 million reduction in spending on education and another $68 million cut for Health and Human Services.

The writing has been on the wall for some time. School superintendents have been warned that aid to education would be declining and many have prepared for it. And while the predictability of the situation doesn’t alleviate the pain, it should have helped guide state officials toward responsible solutions.

That’s not the case, however.

Across the street from the Blaine House, members of the Legislature have been talking about raising revenues to help balance the budget.

The Taxation Committee has been eyeing business tax exemptions as potential sources of additional funds. One of the tax breaks on the table is the 95 percent sales-tax exemption given to manufacturing companies for fuel and electricity.

Manufacturing can be an energy-intense proposition to begin with, and the pressure to cut costs in today’s global economy has put additional strains on many companies. Maine’s higher utility costs and cold climate put an extra burden on many manufacturing industries.

To talk about raising taxes on fuel in the midst of a recession during the coldest months of the year seems ridiculous.

Just last week, Rep. Tom Watson, D-Bath, raised the issue of manufacturing sales-tax breaks in his own district. It seems that Watson, who is ineligible for re-election due to term limits, wants to take a new look at the shipbuilding tax exemption, which has helped Bath Iron Works to the tune of about $3 million a year.

Yes, the state’s selective tax-break system is a hodgepodge of laws that tilt the playing field in some strange ways and favor some industries over others. That’s another editorial entirely. But the last thing Maine needs to do now is to raise costs for some of the state’s largest employers.

There’s been no shortage of stories about layoffs, shutdowns and closings at paper mills and other manufacturing businesses over the past few months, and the effects on our area have been devastating.

But it’s time to bite the bullet: Lawmakers should avoid counterproductive measures that will inhibit the state’s recovery or make Maine’s business climate any more difficult.

We applaud Gov. John Baldacci’s responsible approach. By avoiding new fees and taxes, he’s not hindering businesses from rehiring or creating new jobs.

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