AUGUSTA (AP) – State government’s revenue forecasting committee assembled Tuesday to review a proposed upward reprojection of anticipated revenue worth more than $87 million for the current fiscal year and another $180 million or so for the two-year budget cycle that begins in midyear 2007.

A report from the panel is due by week’s end and approval of new estimates in those ranges would go a long way toward easing – although far from eliminating – budgetary pressures facing the new Legislature and Gov. John Baldacci as he heads into a second term.

On Oct. 2, Baldacci administration officials said state government was confronted by a potential gap of $570 million between available resources and anticipated demands for the next biennium.

The structural gap analysis was released then in response to a statutory deadline and projected a potential gap slightly larger than the one estimated in July by the Legislature’s Office of Fiscal and Program Review, which ranged from $525 million to $550 million for the 2008-2009 fiscal years.

The $570 million difference between resources and demands contrasts with projected gaps of $964 million estimated in 2002 before Baldacci took office and $733 million two years ago.

Administration officials said more than one-third – $202 million – of the $570 million structural gap estimate was attributable to increased state aid to local schools.

To catch up with a citizen-initiated requirement to hike the state share of local school funding to 55 percent, the state is putting up an additional $833 million over four years, administration officials said.

Heading into the new legislative session, Baldacci has already detailed a major new spending priority.

A week after the administration’s structural gap announcement in October, Baldacci and the Maine Hospital Association announced an agreement designed to pay off hundreds of millions of dollars owed for the cost of services to Medicaid patients.

Under the plan, the state would raise hospitals’ weekly payments by including $82 million in state funds for hospitals in state fiscal years 2008 and 2009 – producing $221 million in combined state and federal funding, the joint statement said.

During those same two years, the state would include $20 million to pay for 2004 hospital settlements. That would produce a total of $54 million in state and federal money, according to the Baldacci administration and the hospital association.

The agreement calls for another $102 million in state money – for a total of $275 million in state and federal funds – to be budgeted for fiscal years 2010 and 2011 so that all remaining MaineCare hospital settlements would be covered.

Members of the Revenue Forecasting Commitee include Chairman Jerome Gerard, who is acting State Tax Assessor, James Breece of the University of Maine System, Marc Cyr, an analyst with the Legislature’s Office of Fiscal and Program Review, State Budget Officer Ryan Low, Director Grant Pennoyer of the Office of Fiscal and Program Review and State Economist Catherine Reilly.

AP-ES-11-28-06 1304EST