AUGUSTA (AP) – One day after nudging open the door to new taxes, Gov. John Baldacci returned Tuesday to his standard line of emphasis in saying that generating new revenue to help cover a widening state budget gap would be only a last resort.

“It’s not a solution,” Baldacci said in addressing the issue of new taxes during a brief interview on WGAN radio.

As before, however – most recently in a prepared statement Monday evening – Baldacci did not appear to categorically rule out new levies.

Taxes are, he said on the radio, “frankly something I’m not looking at right now.”

The governor’s comments came on the morning after the state’s Revenue Forecasting Committee, in a widely anticipated move, affirmed a second $95 million downward adjustment of General Fund revenue estimates in three months for the biennium.

Mirroring similar action taken in November, the panel scaled back its projections largely to reflect negative economic trends that have and are expected to continue to further constrain state tax collections.

The forecasting group’s focus was most closely fixed on the sales tax and corporate income tax lines. The new forecast lowers the sales tax line projection by $29.5 million and the corporate income tax line by $23.2 million.

In his initial response to the reprojection Monday evening, Baldacci said spending considerations must come “first.”

“I know many people are asking about higher taxes. I believe we must first have a comprehensive discussion about spending and our priorities as a state. We must be cautious about adding to the burden that Maine people and businesses must carry,” said Baldacci, a former Democratic legislator and congressman who has successfully rejected broad-based tax increases since becoming the state’s chief executive in January 2003.

The governor also suggested Monday evening that his pledge to not rely on so-called Rainy Day reserves to offset the first $95 million revenue rollback might not apply to the latest scaling down of estimates.

“I have been reluctant to consider using money from the budget stabilization fund to offset the earlier $95 million revenue downturn. Using one-time resources to resolve what appears to be an ongoing problem is not a real solution. However, with only a few months remaining to bring the current fiscal year back into balance, this option will be considered,” Baldacci added.

State reserves have been pegged in the range of $160 million – about the same amount that would be raised annually by a 1-cent increase in the state’s 5 percent sales tax.

For months, leading Republicans have voiced opposition to new taxes. At least some Democrats have been more open to the possibility.

One sketchy plan circulating in Democratic circles now would combine a new, lower flat income tax rate with some consumption tax expansions, such as a removal of exemptions for select consumer services such as amusement, an increase in the beer and wine excise for larger producers, and increased tax on prepared meals and lodging to line Maine up with New Hampshire and an expansion of the tax on prepared meals to cover soda and snacks.

Baldacci said on radio Tuesday that government reorganization – he variously mentioned schools, jails and natural resource agencies – remains central to his overall fiscal approach.

Without legislative cooperation he warned of “a long, difficult summer because I’m not giving in.”

Reiterating that his revised budget-balancing package would be ready next week, Baldacci also returned to an occasional lament that some accomplishments of his administration – eliminating a business tax on equipment, lowering unemployment taxes, promoting economic development zones – may not be fully appreciated.

“But we have done a lot and we have to get the word out more,” the governor said.

Later Tuesday, in prepared testimony for the Appropriations Committee, acting State Tax Assessor Jerome Gerard offered two cautions on the new Revenue Forecasting Commission report.

Gerard, who is chairman of the forecasting panel, said a negative April surprise in tax collections could exacerbate the anticipated revenue gap.

Additionally, he warned that “some alternative economic scenarios” assume “a longer and deeper impact from the housing downturn and oil prices.”

If that happens, Gerard said, “it is possible that the U.S. economy could have a so-called ‘double-dip’ recession where later this year, when the impact of the economic stimulus package wears off, the economy enters another period of slow or declining economic growth.”

Gerard also noted that a portion of the new negative revenue reprojection – the better part of $20 million – stems from a reduction in revenue collections by the state Department of Health and Human Services.

AP-ES-02-26-08 1341EST