During his campaign for governor, Republican Paul LePage promised to control spending and “reverse the direction of the state.”

Some Democrats wonder what direction LePage is talking about.

They say that Gov. John Baldacci, over the course of eight years, governed as a centrist and often frustrated members of his own party by refusing to raise broad-based taxes.

Prodded by recession-driven reductions in revenue, Baldacci made the kinds of steep budget cuts that some of his Republican predecessors in more prosperous times never would have considered.

During his two terms, Baldacci eliminated more than 1,000 state jobs. Adjusted for inflation, the fiscal 2010-11 general fund budget of $2.69 billion is less than the budget Baldacci inherited when he became governor in 2003.

Some of Baldacci’s biggest and most controversial initiatives were aimed at making government work more efficiently: consolidating school districts and the administration of county jails.

Baldacci also merged the departments of Human Services and Behavioral and Developmental Services.

Ben Dudley, a liberal Democrat who represented Portland for four terms in the House, said Baldacci’s fiscal discipline didn’t always serve the interests of Mainers.

Nevertheless, the governor’s success at balancing the budget without any broad-based tax increase is an accomplishment that many Mainers apparently overlook.

“To the larger public, that isn’t widely known,” Dudley said. “There is a hunger for a tighter, leaner state government that doesn’t reflect the fiscal discipline of John Baldacci.”

The state’s financial challenges will continue during the LePage administration. Baldacci had federal stimulus money to cushion the blow of the recession, and now that money is running out, leaving a huge budget shortfall for LePege to fill.

In addition, the state may be forced to put hundreds of millions of dollars into its pension fund to make up for stock market declines.

CUTS TO HEALTH CARE POSSIBLE

If LePage wants to take the state in a different direction, there are several ways he can go, said Peter Mills, an outgoing senator from Somerset County who lost to LePage in the Republican primary for governor.

As a Republican, he said, LePage won’t be beholden to state workers unions for getting members of his party elected, so he can take a harder stance when negotiating pay and benefits.

Rather than balance the budget with across-the-board cuts, LePage will likely eliminate entire programs, Mills said. Moreover he said, LePage will probably avoid short-term “gimmicks,” such as Baldacci’s decision in 2003 to lease the state’s wholesale liquor operation, which filled a budget gap but gave up revenue in the long term.

On health care in particular, Mainers can expect a huge difference between Baldacci and LePage, said Dick Woodbury, an independent from Yarmouth who was elected to the Senate on Tuesday.

While Baldacci was a fiscal conservative, he said, he acted like a true Democrat on health care as he made broadening access a priority. Baldacci noted in an interview that Maine is now sixth in the nation in the percentage of people who are covered by health insurance.

Woodbury said Baldacci and the Democrats have relied on Medicaid — a federal program that provides health care for the poor — to expand access.

He said he expects LePage to make significant cuts to Medicaid funding because it has become such a large part of the budget and the spending levels may not be sustainable. While 65 percent of the cost is paid by the federal government, Maine Republicans say the program has grown so large and costly that it is crowding out other parts of the budget and making it difficult to lower high-income tax rates.

LePage has already said he wants to sue the federal government to block provisions of the Affordable Care Act, the federal health care reform law.

ECONOMY HURT BALDACCI

The economy will play a major factor in determining how successful LePage can be. In that regard, Baldacci couldn’t catch a break.

He led Maine through two recessions — the first just as he came into the office, and the most recent one the worse since the Great Depression.

People will remember Baldacci for his steadfastness and even his courage in trying to address budget shortfalls without resorting to broad-based tax increases, said David Flanagan, a former president of Central Maine Power Co. and chief legal counsel during Gov. Joseph Brennan’s first administration.

“He understood that the state could not afford that without damaging its competitiveness,” said Flanagan, a Democrat who was involved in Eliot Cutler’s campaign for governor. “He understood that and he stuck to it. It was a very hard thing to do.”

While Baldacci avoided major tax increases, he generated new revenue by raising fees and the cost of permits, which had the same effect as a tax increase, said Joe Bruno of Raymond, a former minority leader for Republicans in the House

“Did the cost of living in Maine go down?” he said. “It did for a while. Then it shot back up again to balance the budget.”

Bruno said Baldacci was a true fiscal conservative when he served in the Legislature, but as governor he moved to the left more than he wanted because the Democrats held control — a pressure point that LePage won’t have.

Baldacci, whose two terms made him ineligible to run for re-election this year, said that if he could have continued as governor, he would have worked to lower the state’s tax burden to the national average.

It 2004, Maine had the fifth-highest tax burden in the nation, according to the Tax Foundation, a Washington, D.C.-based think tank.

By 2008, Maine was ranked 15th.

In his last two months in office, Baldacci said, he plans to work with LePage and his team to help with the transition. He intends to invite LePage to lunch at the Blaine House this month.

Looking back at his eight years in office, he reflected on some of the hard decisions he and lawmakers had to make. In 2004, he recalled, more than 1,000 people crammed into the Augusta Civic Center on a Monday to denounce budget cuts he had proposed.

Hundreds of people, many of them with brain injuries, pleaded with two legislative committees to protect their services, many telling heart-rending stories that left lawmakers drained and angry.

“Some of the Republican leaders came back to me and said they couldn’t support the cuts,” Baldacci said. “I said, ‘If you are not going to support them, I don’t think the Democrats are going to support them.’ ” 

Staff Writer Tom Bell can be contacted at 791-6369 or at:

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