COLUMBIA--Republicans in the state House have proposed a new way to fund Medicaid shortfalls, sidestepping a plan to raise cigarette taxes.

The GOP-controlled House began debate Tuesday on the state's $5.1 billion budget.

The current spending plan leaves Medicaid, which provides health care to many of South Carolina's poorest residents, about $80 million short of what's needed to maintain current programs.

However, Republicans are pushing a plan to restructure the bonds that the state sold after reaching a massive lawsuit settlement with tobacco companies several years ago.

"We're announcing a plan that will adequately fund Medicaid without raising taxes," said House Speaker David Wilkins, R-Greenville.

Republicans, however, refused to comment on specifics Tuesday.

The plan may be similar to what former Democratic Gov. Jim Hodges offered in his executive budget in December: refinancing bonds to generate $40 million to head off budget cuts. Hodges left office in January.

The new restructuring plan could generate as much as $45 million for Medicaid programs in the first year and $36 million a year afterward, said House Ways and Means Chairman Bobby Harrell, R-Charleston.

Instead of being rolled into the budget bill, the measure would become part of a separate bill dealing with health agency restructuring.

Democrats said Republicans were responding to pressure to find a way to fill gaps in Medicaid spending.

"It's interesting that the House Ways and Means Committee is now looking at Democratic plans to generate revenue for Medicaid," said Legislative Black Caucus Chairman Jerry Govan, D-Orangeburg.

The Ways and Means Committee, which writes the budget, is reviewing four plans from private companies that could be involved with restructuring the bonds, Harrell said.

He would not disclose which companies offered the proposals nor details for "competitive reasons."

In 2001, South Carolina sold tobacco settlement bonds instead of waiting 30 years for payments that would total $3.2 billion and risking that tobacco companies could not make the payments called for under the settlement.

One way to raise more money off the bonds would be similar to what homeowners do by refinancing their mortgages. By financing a loan at a lower interest rate, the homeowner makes lower payments each month and can save hundreds - even thousands - of dollars a year.

However, none of the restructuring proposals have been reviewed by the state Treasurer's Office, which would handle bond refinancing deals, agency spokesman David Adams said.

Hodges' proposals "were fairly negligible for the state" in generating money, Adams said.

Even with the addition of $45 million next year, Medicaid funding relies on $70 million generated by one-time sources, such as tapping $20 million from school districts' Medicaid programs.