AUGUSTA – Gov. John Baldacci, signing a bill Friday that replaces a controversial borrowing plan in the pending state budget with a $250 million combination of spending cutbacks and higher tobacco taxes, credited Democratic majorities in the Legislature for enacting a “responsible proposal” and suggested that Republican boasts of success were hollow.

Critics of the borrowing provision that was effectively repealed last week may be among those claiming victory, Baldacci said, but those who failed to approve the alternative “were kind of missing in action when the votes were counted.”

The message from Democratic legislative leaders who joined the governor for the bill-signing was similar.

“I’m just very proud of us all,” said Senate President Beth Edmonds, D-Freeport.

“It was Democrats” who made the budget change, said House of Representatives Speaker John Richardson, D-Brunswick. He added that in choosing to boost the cigarette tax rather than cut deeper into human services programs, Democrats picked “the right social thing to do.”

Divided largely along party lines, the House and Senate enacted the budget measure a week ago. Its key financing element is a $1 doubling of the tax on a pack of cigarettes.

Final approvals, approximating the Democratic numerical edges in both chambers, came on votes of 74-72 in the House of Representatives and 19-14 in the Senate.

The new bill addressed a borrowing provision that had come under fire from virtually all sides since its late March passage – by Democratic House and Senate majorities – within a $5.7 billion two-year spending plan for state government that is to take effect July 1.

A people’s veto petition drive – led by Republican lawmakers and activists – had been under way and lawmakers from both major parties, along with Baldacci, called for repeal and replacement of the borrowing plan.

Baldacci, who blasted the launching of the people’s veto petition drive as irresponsible, said Friday the state now had to take into account potential losses of revenue should job losses from military base closings or realignment occur.

The revenue bond plan that had been contained in the budget would have drawn on more than a dozen sources, including accounts within the Secretary of State’s Office, for repayment.

The borrowing provision in the budget was routinely described as a $450 million item. That figure included funds that would be obtained through a bond issuance and applied to cover the first two years’ worth of debt service as well as some bond issuance costs.

Supporters originally said the measure would allow the state to reduce its unfunded pension liability, build up reserves and avoid sharper curbs on social service programs than those already put forth.

Critics denounced the borrowing plan as an unwise application of one-time funds for ongoing operational costs.

On Monday, Republican organizers of a people’s veto petition drive expressed confidence that they would have collected enough signatures to force a statewide vote.

They voiced satisfaction at the deletion of the borrowing plan, even as they said they did not support the higher taxes used as half of its replacement.

Baldacci said the budget adjustments would be pointed out to analysts on Wall Street, where three agencies lowered Maine’s bond rating in advance of a June bond sale.

The governor also said he hoped repeal of the borrowing would bolster new State House discussions over more traditional bonding proposals, which would be subject to voter ratification.

“I hope it will segue very well for our discussions with Republican leadership,” he said.

Republican lawmakers who caucused at the State House on Thursday said bipartisan talks on new borrowing are expected next week.