The budget will now go to the full Legislature, which must approve the package by a two-thirds vote in order for it to go into effect at the start of the fiscal year on July 1.

The two parties had been $100 million apart earlier this month when Democrats proposed a 75 cent hike in the cigarette tax, which Republicans rejected. Governor John Baldacci had proposed a $1-a-pack hike.

In the end the only new tax on individuals in the budget is an increase in the amount of sales tax the state will automatically collect for tax-free items purchased out-of-state or on the Internet. That so-called use tax increases from .04 percent of a taxpayer’s adjusted gross income to .08 percent to raise $1 million more a year from those who don’t itemize what they purchase

Instead of raising new taxes, the Appropriations Committee took money that hadn’t been spent in various accounts or from funds earmarked for special purposes; benefited from a $17 million improvement in tax revenue projections; and cut budget requests.

Some of the more controversial big-ticket items ultimately agreed on by both sides include:

• Taking $9 million earmarked for the state’s affordable housing fund paid for through the real estate transfer tax.

• Creating a government efficiency commission charged with finding $9.5 million in the operation of state government.

• Refusing the Governor’s request to take over $10 million in payments for the expansion of Medicaid to parents, money now paid by the Dirigo Health Agency.

• Eliminating $4 million in new research and development money.

Less painful agreements include:

• Paying for the administration of the Maine State Retirement System through interest earnings rather than a general fund appropriation for savings of $12.5 million.

• Prepaying the state’s share of teacher retirement benefits for a savings of $4 million.

• Taking $2 million from the fund for Healthy Maine that won’t be needed for a beefed-up smoker’s Quit Line since cigarette taxes aren’t going up $1 a pack.

• Taking $1.3 million in money not spent for salaries in positions serving the Legislature, including the law library. There are no layoffs associated with this money because it builds up over time when there are vacancies.

Some controversial proposals were rejected altogether, including the Democratic plan to cut the businesses equipment tax reimbursement (BETR) program by $6.7 million and the Republican call to cut nearly $20 million out of the state employee health insurance plan. That plan was cut by $1 million, but those savings already had been planned.

There also were no more major cuts in Medicaid, even though Republicans had called for a $19 million cut in a program covering adults without children who are living below the poverty line. The Medicaid program was cut by more than $65 million for the biennium in the Governor’s original budget and additional cuts were made when the state realized its corporate income collections were going to come up short for 2008 and 2009.

At that time the state also cut $17 million in school aid for school year 2007-2008 on top of the $36.5 million the Governor cut as part of his school consolidation plan for 2008-2009.

The Appropriations Committee agreed to count on those school savings even before it put the final touches on a school district consolidation plan that may or may not get support in the full Legislature as part of the overall budget.