AUGUSTA -- Gov. John Baldacci signed an executive order Wednesday to cut spending by nearly $80 million to help close a shortfall in the $3 billion budget.

Of the $80 million, the deepest cuts are to the Department of Health and Human Services, which will lose $31 million, and the Department of Education, which will lose $28 million. The $80 million cut is a 2.6 percent reduction in the annual state budget.

"We're in a very difficult national recession," Baldacci said, at a news conference in the Statehouse Cabinet Room. "All states are going through this. Maine is not immune."

Four workers at DHHS will lose their jobs as part of the cuts. Because the governor's powers are limited in a curtailment, he could only eliminate jobs directly affected by cuts to programs, said Ryan Low, commissioner of the state Department of Administrative and Financial Services.

Many state jobs will be left vacant to save money, Baldacci said. DHHS Commissioner Brenda Harvey said although her department reduced spending, it avoided major cuts to services for needy populations. She said $25 million of the $31 million in cuts were not related to services or programs. The state did reduce funding for home-care services for the elderly, which will increase the time people are on a waiting list for help, she said.

"We're not taking people off services," she said.

Betsy Sweet, a lobbyist who works on behalf of several social service agencies, praised the department for not cutting services.

"The department did a yeoman's job to mitigate the impact on individuals who need help in this terrible year," she said. "We somehow have to deal with the fact that people need services more when the economy is bad."

On the education side, Baldacci cut $27 million in aid to local schools and cut $1 million from other parts of the state Department of Education budgets.

He also cut more than $8 million from the University of Maine System and $3 million from the community college system.

In a statement, Sen. Elizabeth Mitchell, D-Vassalboro, the Democratic nominee for Senate president, said 41 states are facing budget shortfalls.

"As dire as the situation is in Maine, prior efforts to trim the state budget appear to have left state finances in a better position than they may otherwise be," Mitchell said. "Maine is not alone facing the effects of the Wall Street meltdown, but the work done last session has put us in a more competitive position."

Virtually all state agencies will see cuts as part of the curtailment. Baldacci said he tried to preserve "public health, safety and the economy" when making the cuts.

Baldacci said the curtailment order, which does not require legislative approval, is the first in a three-step process the state will take to address falling revenues.

Earlier this month, state revenue forecasters predicted a $100 million to $150 million revenue shortfall in the budget that covers state spending through June 30.

By immediately cutting spending by $80 million, Baldacci took the first step to close that gap. On Friday, forecasters are expected to refine the shortfall projection.

Then in mid-December, Baldacci will present lawmakers with a supplemental budget that will include the curtailment order and additional cuts that are necessary to close the gap. And in January, he will present lawmakers with a new budget for the two-year cycle that starts July 1.

Baldacci described a curtailment as "a blunt and limited tool" that does not allow him to cut budgets for the legislative or judicial branches of government. They will be notified later this week that they are to submit cuts for consideration in the supplemental budget, he said.

Rep. Hannah Pingree, D-North Haven, the Democratic nominee for House Speaker, said legislators are prepared to trim their own budget.

"These are very tough times and the Legislature will be making sacrifices as well," Pingree said in a statement. "The Legislature is not immune from this situation and the next Legislative Council will be making cuts to its own budget."

On the Republican side, Assistant Senate Minority Leader Jonathan Courtney, R-Springvale, said lawmakers from his party are prepared to deal with a difficult budget year.

"We're going to be open-minded to working in a bipartisan way to solve the problems of the day," he said.

Susan Cover -- 620-7015

scover@centralmaine.com