AUGUSTA — Gov. John Baldacci used more state revenues and new federal Medicaid dollars to restore about $79 million in proposed budget cuts in his latest plan to balance the books, which he offered to lawmakers Wednesday.

“From the beginning I have been committed to presenting a fiscally responsible plan to balance the state budget,” he said. “The slight improvement in the economy and the increased assistance from the federal government will allow us to address legitimate concerns in human services and education, while also making investments in Maine’s long-term fiscal health.”

About $37 million would go to the Department of Health and Human Services, focusing on restoring funding for nursing homes, assisted living facilities, disability services, mental health crisis intervention and home-based services.

The Maine Democrat also proposes restoring $20 million worth of General Purpose Aid funding for schools in the fiscal year 2011-12 in an attempt to help local municipalities cope with the impacts of the recession on classrooms.

About $8 million would go toward higher education, including the University of Maine System, the Maine Community College System and Maine Maritime Academy.

Municipalities would receive about $6 million in restored revenue sharing under Baldacci’s proposal as well.

“The goal here is to get it so the services and the delivery of services is higher quality, more coordinated, more efficient and less costly,” Baldacci said. “We think that can happen. It’s unfortunate, the circumstances we’re in, but again, use the opportunity to make the changes that will serve us well into the future.”

The restorations are paid for using about $51 million more in revenue as projected by the Revenue Forecasting Committee and about $28 million more in federal Medicaid funding made possible by an administrative change at the federal level.

The restorations were welcomed by members of the Appropriations Committee, but lawmakers are still working on making about $360 million in cuts to the current budget.

“The work is not done yet; we’re still talking about significant amounts of cuts that are real and will impact the lives of real people,” said state Rep. Peggy Rotundo, D-Lewiston. “It’s still very difficult for institutions of higher education because their funding is still low, but to have those cuts restored makes things a little easier for them. In our community, Lewiston-Auburn College and Central Maine Community College are critically important to the economic development of our area.”

State Sen. Margaret Craven, D-Lewiston, said the governor made good choices in where to direct the funding.

“The restoration to mental retardation services was very encouraging and pulled a lot of those agencies back from the brink,” she said.

Prioritizing K-12 funding and municipal revenue sharing would also help alleviate local concerns about how to hold down property taxes, Craven said.

Baldacci’s proposal also won qualified support from state Rep. Sawin Millett, R-Waterford.

“He addresses the real difficult choices we had to make in a positive way, and I think it was a constructive package,” Millett said. “I believe that the governor has heard some of the Republicans’ concerns about the cliff issue and being in his last year, having come in at a difficult time, I’m sure he’s reminded of the desire not to leave the next governor with a full plate of red ink on day one.”

According to the latest projections from the state Department of Education, which reflects the $20 million in restored funding, Lewiston and Auburn school districts will continue to see more funding than previously anticipated for the 2011-12 fiscal year, though most schools in the state will see less.

Auburn is projected to receive about $710,000 more in 2011-12 than was budgeted by lawmakers in the state budget passed last year. Lewiston is slated to receive about $176,000 more. But because of how the biennial budget was constructed, funding levels for all schools in 2011-12 will be less than it was in 2010-11.

The Appropriations Committee hopes to vote on a budget within the next two weeks.

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