In many ways, the Kennebec Journal's March 21st editorial was right on the money. Maine does indeed need a "steadfast commitment to fiscal conservatism and a new approach" if it is ever to turn around its economy and create a brighter future.

The editorial suggests, though, that eliminating vacant state government positions and scaling back the pay and benefit packages enjoyed by state employees will do little to meaningfully cut the state budget.

The Maine Heritage Policy Center certainly agrees that there are other places to find savings, and recently proposed a series of budget-cutting measures totaling more than $200 million.

But the size of state government and the high level of state employee compensation must be a part of any serious discussion about getting state spending under control.

First of all, the state employs far too many people. Maine state government employs 5.35 workers for every 100 people employed by the state's private sector. The national average is only 4.35, according to the federal government. We estimate that lowering state government's employment level to that national rate would result in a far more manageable state government and a savings to taxpayers of up to $200 million.

There are more than 750 vacant positions in state government, making it relatively simple to make meaningful reductions in state employment levels without layoffs, generating considerable taxpayer savings both now and in the future.

Not only are there too many state employees, they are paid too much.

Nearly a year ago, Maine Heritage Policy Center economist Scott Moody compared average state employee pay and benefits to average private-sector compensation and found that, for 2006, Maine state government employees -- including those in the state's higher education system -- on average receive 21.3 percent higher overall compensation than private sector employees -- $48,080 versus $39,629.

The ratio of state employee compensation to private sector compensation is the eighth highest such ratio in the country. Bringing that ratio more in line with the national average would mean a savings to taxpayers, Moody calculated, of up to $200 million.

Those are real, sustainable budget savings.

The high level of compensation afforded state employees is driven in part by the extraordinary cost of the health care benefits they receive, which are among the most generous in the state. Maine state employees have a $200 annual deductable, but otherwise pay nothing for their health insurance. They have no co-pays and contribute nothing toward the cost of their premiums. Moreover, they enjoy these benefits in retirement as well. Such a generous insurance package is virtually unheard of in the private sector.

The Maine Heritage Policy Center calculates that redesigning the state employee health insurance benefit to more closely match that offered by large private sector employers would save taxpayers more than $30 million.

The savings generated by these changes would reach well into the future. While the present-day costs of the high levels of state employment and compensation are hard for Maine taxpayers to bear, the future costs are enormous. The state has promised its employees retirement pensions and retiree health care benefits whose projected costs stretch into the billions. Cutting compensation levels and the overall size of state government will cut the budget for future generations as well as our own.

The newspaper is quite right that the status quo is no longer acceptable and that far more fundamental changes are needed in the size and scope of state government.

State employment levels and employee compensation, however, must be a part of that discussion. It is a major driver of costs for state government and is one area, like tax burden, where Maine well exceeds national averages.

As the newspaper's editorial put it, legislators must learn to spend what the state can afford and no more. Looking at the size and cost of the state government workforce must be a central part of any approach to make state government more affordable for taxpayers.

Tarren Bragdon is CEO of The Maine Heritage Policy Center, www.mainepolicy.org.