Panel cuts budget to save tobacco fund

AUGUSTA – Just a few hours before Gov. Angus King’s State of the State address, the Legislature’s Appropriations Committee voted unanimously Tuesday to scale back the governor’s $14.4 million supplemental budget for the current fiscal year.

In doing so, the committee scrapped King’s plan to offset a Medicaid shortfall by transferring $10.2 million in national tobacco settlement money that had been set aside in a Fund for a Healthy Maine.

For the time being, under the committee’s revisions, the administration would apply other money toward the shortfall. Total appropriations in the emergency spending plan would be reduced to around $9 million.

Lawmakers have previously earmarked a significant portion of tobacco settlement money for a variety of human services programs as well as anti-smoking measures.

Using money from the settlement to cover gaps in other budget areas has been controversial and Tuesday’s vote by the Appropriations Committee in effect postpones the debate over King’s approach until deliberations on a $5 billion budget proposal for the upcoming two-year cycle begin.

King wants to commit more than $63 million in the 2002-2003 biennium from the same Fund for a Healthy Maine to shore up the cash-strapped Medicaid program.

Administration aides said Tuesday afternoon they did not regard the committee vote as a serious setback.

“We would have preferred to have the issue resolved in the context of this budget,” said Commissioner Janet Waldron of the Department of Administrative and Financial Services.

A co-chairman of the Appropriations panel said she did not believe Tuesday’s committee action indicated how the administration’s plan would be treated in the bigger budget talks, only that the matter ought to be taken up comprehensively.

“It needs to hang together as a package,” said independent Sen. Jill Goldthwait of Bar Harbor.

According to administration figures, appropriating an additional $14.4 million this year as proposed by the governor – with most going to the Medicaid program – would still leave an available cash balance of $18.7 million.

On Tuesday, the administration estimated that the balance left from the revised package endorsed by the Appropriations Committee would be about $14 million.