AUGUSTA -- Gov. John Baldacci said this week that lowering the state income tax is a priority heading into the next legislative session.

Lawmakers called it a promising sign that there may be action on an often frustrating statewide problem.

Baldacci spokesman David Farmer said Tuesday that, as the governor works on the budget for the next two years, he's set a goal of being able to reduce the state's income tax rate of 8.5 percent.

"There is no detail to the plan," Farmer said. "This is something he feels is important to accomplish as we move forward with the budget."

The idea came as a surprise to lawmakers, who said they have been working for the last few years to find a way to reduce taxes.

"I'm thrilled to see he's interested now," said Sen. Richard Nass, R-Acton, who serves on the Taxation Committee.

Nass said he supports the idea of lowering the income tax rate using savings found in the budget. Previous legislative proposals have called for lowering the income tax rate, but raising the sales tax to make up for the lost revenue.

Cutting the income tax by a quarter percent would cost $40 million, said Rep. Thomas Watson, D-Bath, who is also a member of the Taxation Committee.

He, too, said he's supportive of a cut, but isn't sure where the money would come from.

"I would be surprised if we can find enough in further savings to cut the rate," he said.

Watson said the 8.5 percent income tax rate, which kicks in at $18,950 for a single tax filer, is hard on small businesses and residents.

"It's simply too high," he said. "It's one of the reasons we have so many six-months-less-a-day residents in Maine."

Farmer said the reduction could come in the form of reducing the top rate, allowing greater personal deductions or changing state law to conform more closely to federal rules.

It's too early in the process to say what the proposal will look like, he said.

"There are a number of ways we can reduce the burden on middle- and lower-income folks who need it the most," he said.

Nass said he's confident the savings can be found in the budget, particularly in the areas of education and Medicaid.

He said the governor and state lawmakers need to tackle tough issues such as class size, the cost of special education and how many people qualify for Medicaid to find significant savings.

A former member of the Appropriations Committee, Nass said Republicans have found ways to cut $200 million from the state budget, which is approximately $6.3 billion over two years.

"We're not going to effectively reduce the burden on taxpayers until we reduce what we're spending," he said.

Farmer said despite rising oil and gas costs that will be difficult to cover in the new budget, the governor has made it clear this will be a priority when lawmakers meet in a new session in January.

"There's never an easy time to do big things," Farmer said.

Susan M. Cover -- 621-5645

scover@centralmaine.com