Though Maine’s state budget is still up in the air, one piece of it was settled this week when President Clinton signed a bill to send aid to Kosovo and for a wide range of humanitarian and disaster relief. No, Maine doesn’t qualify as a disaster area, but it will benefit from a rider on the bill that blocked the federal government’s ability to take two-thirds of the states’ settlement with the tobacco industry.

The Clinton administration asserted for two years that it had a claim upon any money the states wheedled out of Big Tobacco. They wheedled $246 billion in a remarkable settlement. The president based his claim on the idea that the federal government pays about 60 percent of Medicaid costs, and Medicaid protects the federal government’s interest by making states responsible for pursuing third parties.

There were a couple of things wrong with that argument, most obviously that Congress had previously taken its shot at settling with Big Tobacco and missed. Secondly, the settlements with the states were reached without the help of the federal government, and the state attorneys general were careful to craft their cases to avoid the Medicaid issue. For instance, they based the amount of settlement on state costs only, with added assessments for violation of state consumer laws and deceptive trade practices.

Fortunately, Congress saw through the holes in the president’s argument and sided with the states. For Maine, this means that it will soon receive $63 million for the first year of the settlement and approximately $57 million thereafter until 2010, when the figure rises to closer to $70 million. The money starts coming in either when states equalling 80 percent of the total amount of the settlement approve of the deal or by July 2000, whichever comes first. Because the money is divided by number of Medicaid beneficiaries, the 80 percent rule, in effect, requires 48 states to await approval by New York and California or receive the money next summer.

The president’s signature on the disaster bill adds a degree of certainty to the state budget process. Now that Maine knows how much it will receive and approximately by what date, state lawmakers can begin to make decisions about how best to use the money. Financing health care, of course, should be the priority.