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State House: As the session wraps up, schools, state benefits and county jails also are on the agenda.

By SUSAN M. COVER, Blethen Maine News Service April 2, 2008

AUGUSTA — Gov. John Baldacci said Tuesday that he will support an increase in the cigarette tax to help pay for the Dirigo Health program.

Dirigo, the state's health insurance program for individuals and small businesses, will be one of the major issues facing lawmakers in the last days of the legislative session.

With the $190 million supplemental budget behind them, legislators will turn their attention to health care, jails, school consolidation, a mix of labor bills and a host of other issues between now and the April 16 adjournment deadline.

Later this year, lawmakers may have to deal with yet another revenue shortfall.

"It wouldn't surprise me that at some point in the year, we may have to come back with another emergency supplemental budget," said Assistant Senate Minority Leader Richard Rosen, R-Bucksport.

Here's a look at some of the issues that are expected to dominate the rest of the session:

DIRIGO HEALTH

House Majority Leader Hannah Pingree, D-North Haven, is sponsoring a bill to help pay for Dirigo with a 50-cent-per-pack increase in the cigarette tax.

Last month, Baldacci said he supported the content of the bill but the timing wasn't right to discuss an increase in the cigarette tax.

Now that the budget is balanced, Baldacci said, he's prepared to work with lawmakers on the bill.

"I support a cigarette tax to offset the savings offset payment," he said, referring to the system that helps pay for Dirigo, "as long as it supports health care to working families and small businesses."

The offset payment is controversial, and lawmakers have been looking for other ways to fund the program, which provides health insurance for about 14,000 Mainers.

Dirigo is funded with employee-employer premiums and the so-called offset payment from insurance companies. The program also covers 5,600 Medicaid-eligible adults, which costs the state about $5 million.

COUNTY JAILS

While Baldacci initially proposed a state takeover of county jails, a legislative committee, county personnel and municipal officials have spent weeks working out a compromise plan.

A supervisory board for state and county corrections would oversee operations, manage bed space and work for efficiencies.

Sen. Bill Diamond, D-Windham, said the Criminal Justice Committee is working out the final three areas of contention this week, and a bill proposing a new correctional system is expected in the Legislature next week.

Budget cuts left a $1 million hole to fill, there's a gap in the timing of when the board would be created, and there's disagreement about whether to charge for bed space, he said.

"We have to get these three major pieces worked out," he said. "I'm an optimist."

SCHOOL CONSOLIDATION

There are a few bills outstanding that seek to change parts of the school district consolidation law passed last year by lawmakers.

The major bill would allow districts to negotiate cost-sharing agreements and make other financial fixes. The proposal, which failed in the House on Tuesday when it fell four votes shy of a two-thirds majority, has been held for further consideration.

The bill contains language regarding school unions that is not supported by the state Department of Education. The department hopes a bill will pass by the end of the session so districts can move forward with consolidation agreements, said spokesman David Connerty-Marin.

"Districts have either slowed down or come to a standstill," he said. "Not a lot of work has happened in many districts since January."

STATE BENEFITS BILL

Senate President Beth Edmonds, D-Freeport, is sponsoring a bill that would reduce the penalty state employees and teachers face for retiring early.

The "cliff bill" is bound to be controversial.

Edmonds said her bill...