If the state is ever going to lower its tax burden to the middle of pack nationally, it needs to reduce spending by $700 million, and the only place to find that kind of money is in education and Medicaid.

Richard Silkman, the state planning director under Gov. John McKernan, delivered that controversial message at the Maine Center for Economic Policy’s “Streamlining Government” summit Monday as part of a panel on analyzing Maine spending.

“How do you become average?” when it comes to tax burden, asked Silkman, who serves on the board of the Maine Public Spending Research Group. “You have to spend at the national level.”

With 80 percent of Maine’s budget going to education and health and human services, that means those are the areas to cut to achieve savings.

And, it goes well beyond the consolidation being proposed by Gov. John Baldacci, although that helps. Silkman pointed to the fact the state ranks 44th in terms of the number of students in kindergarten-Grade 12, and eighth in per-student spending. Fewer districts could save around $40 million.

In his presentation Silkman outlined state spending as compared to the national average and came up with these additional goals:

* Increase the student-teacher ratio from 11.9-1 in Maine to the national average of 14-1 and save $117 million by having fewer teachers.

* Reduce the number of students identified as having special needs from Maine’s 18.3 percent to the national average of 14 percent and save $63 million.

* Reduce the percent of population on Medicaid from 23 percent of its population to the national average of 19 percent. Moving to the national average would save $167 million.

Maine spends, on average, $8,000 per Medicaid recipient versus the national average of $4,300. If the state spent at the national average it would save $300 million in general fund money and $900 million in total state and federal funds.

“It’s simple arithmetic,” Silkman said.

Others criticized his presentation as too simplistic, saying health-care costs in Maine drive Medicaid costs, and kicking people off the Medicaid program would add to bad debt and charity care in the state’s hospital emergency rooms.

Christopher “Kit” St. John, head of the Maine Center for Economic Policy, who stood in for the keynote speaker from the Federal Reserve after she was stopped by Monday’s snowstorm, said the real issue is what do Mainers want to spend to care for their fellow citizens.

The Maine Public Spending Group identifies itself as a non-partisan think tank that advocates for government consolidation and streamlining. Silkman serves as the vice president of its board of trustees and David Flanagan, former head of Central Maine Power, as its president.