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SALT LAKE CITY (AP) -- In a last-minute fix for the state budget, the Legislature's Executive Appropriations Committee took $9.1 million on Monday from the state's tobacco settlement fund.
The committee forwarded its budget-balancing plan to the House and Senate, but it began to unravel after House Republicans took a straw vote in caucus to reinstate $13.7 million worth of sales-tax exemptions.
The tobacco money rounded out a budget plan that does little for public schools. It raises per-pupil funding by $20 to $2,150 a year -- not enough to move Utah from dead-last among states in education funding.
The agreement does not include an ambitious Senate plan to boost personal or corporate income taxes by $97 million for education.
Instead, the plan hikes the beer tax and the state's markup on liquor and wine. It also extended the sales tax to cover newspaper subscriptions and newsstand sales; vending machine snacks and beverages; and cable and satellite television bills.
Hours later, however, 39 House Republicans voted in caucus to keep all of those sales-tax exemptions. That's one vote more than they need to make it official on the House floor.
The Senate had voted Friday to also close the sales-tax loophole for factories on new machinery, but the Executive Appropriations Committee -- a panel that includes House and Senate leaders -- saved that exemption.
The committee approved cuts in optional Medicaid services but rejected another cut that would have removed up to 6,000 people from the government health insurance program.
Medicaid recipients held a vigil in the Capitol rotunda to protest the elimination of optional services for dental care, physical therapy, hearing and eye care.
The Senate voted 23-3 Monday for a supplemental appropriations act that reversed the larger Medicaid cut. House approval was expected to follow.
Medicaid is off the hook for a huge reduction, "but that's not to say it was a big winner," House budget leader Ron Bigelow said. "Everybody suffered in this budget."
The choices are easier in some ways for legislators who've spent two years cutting state agencies and programs to close revenue shortfalls.
Now lawmakers are reversing some of the additional cuts that were in the making. The restorations were made possible in large part by projections that Utah's economy will turn a corner this year and reverse the erosion of tax revenue.
The Executive Appropriations Committee even found $2 million to help the Army's Dugway Proving Ground upgrade a runway that Air Force jets could use in an emergency.
The new runway was billed as a hedge against the next round of military base closings. Utah hopes to showcase that and other investments to justify Hill Air Force Base's contribution to national defense.
The appropriations committee also came up with $400,000 to help preserve an elaborate set of dinosaur tracks unearthed in St. George.
The tobacco fund was established by Utah legislators as a permanent repository for up to $1 billion over 25 years from cigarette makers who agreed to settle claims by Utah and other states for reimbursement of Medicaid services for smokers.
Utah legislators originally planned to spend only the fund's annual interest earnings. But the windfall proved too tempting and legislators are moving to raid the fund for a second time to bail out the state budget.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
