With most of the bills out of the way, lawmakers this week will turn to the state's budget, a hulking fiscal behemoth that, depending on whom you listen to, is either full of holes or totally sound.

The first sign of budget battles to come appeared on Thursday when the Senate killed a bill that would have increased the tobacco tax by 28 cents, setting the rate at 80 cents per pack. However, the $87 million for education funding the tax was expected to raise still appears in the Senate's budget, so the Senate could end up adopting the tax after all.

The Senate's $8.6 billion budget differs sharply from Gov. John Lynch's initial proposal, with the Senate proposing deep cuts in funding to the state's Health and Human Services Department among others. However, the governor had some sharp words for senators in a statement released last week, calling the cuts "unnecessary" and stating that Senate budget writers are being pessimistic about future state revenues.

"With reasonable revenue estimates and a modest increase in the tobacco tax, we can afford to put in place a good budget and a lasting solution to school funding," Lynch said.

A solution to the vexing question of school funding may be the biggest roadblock in passing the budget. Senators must consider how much money certain towns would receive, the possible elimination of donor towns and how the state will make up for any shortfalls in the education budget. Under the Senate's current plan, the statewide property tax and donor towns would gradually be reduced; poor homeowners needing assistance would still receive tax breaks. Competing plans by the House and Gov. Lynch call for the complete elimination of donor towns and the statewide property tax. The Senate's plan also provides increased funding for disabled students.

Another thorny budget issue was temporarily settled last week when Gov. John Lynch and the Executive Council finally reached a decision on E-ZPass. The long-delayed automated toll system has been hampered by debate over when the state should chuck the tokens it currently uses. Under the new plan, tokens would stick around until July 2007 and E-ZPass would start appearing in tollbooths next month. The E-ZPass transponders will be available later this month and will sell for $5 for the first year and $30 after. However, the Senate could derail the plan-under the budget up for consideration this Thursday, senators would eliminate the use of tokens, which cost the state $750,000 a year to process, by Jan. 1. The Senate's plan also does not allow for as big a price break on the transponders, but does offer a 30 percent discount for noncommercial drivers and a 10 percent discount for commercial drivers. No matter what happens, motorists will be able to purchase transponders in June either by phone, on the Web, or at rest areas in Hooksett, Nashua and Seabrook.

Also last week, House members went easy on former House Speaker Gene Chandler. The Legislative Ethics Committee had recommended the Bartlett representative be expelled from the Legislature for ethics violations stemming from not reporting the more than $64,000 he's received from lobbyists at a series of "corn roasts" since 1998. After a three-hour debate last week, the House voted 189-172 against the committee's recommendations, opting instead to merely censure Chandler. After the vote to officially reprimand Chandler, many lawmakers stood up and gave him a standing ovation.

All meetings are open to the public. For the low-down on voting results and a full calendar, visit http://gencourt.state.nh.us.