More seniors would see a cut in their property-tax bills, public college students could see a tuition freeze this fall, and more uninsured Ohioans would get access to healthcare coverage under Gov. Ted Strickland?s proposed two-year budget.

But large retailers would lose part of a discount on sales tax they collect for the state, most state agencies would get no increase in funding or a cut, and all cigarettes brought into the state would be taxed.

Strickland introduced his $52.9 billion budget yesterday that, as he promised in his State of the State address the day before, proposes investing more money in his priorities while requiring "sacrifices" in other areas.

The budget now goes to the legislature, where the first House hearing is set for Tuesday and concerns already are surfacing that promise lively debate before the measure must be passed by June 30.

"I think we?re going to have a lot of questions," said Rep. Matthew J. Dolan, R-Novelty, chairman of the House Finance Committee.

Dolan and other Republican legislative leaders are withholding judgment on key proposals until they see more details, but they?re wondering whether Strickland can really pay for his ambitious agenda and proposed new spending.

Strickland, who flew to five cities yesterday to stump for his plan, said he?s ready to defend it.

"We think we have answers for the questions that are forthcoming," Strickland said after touring Columbus Children?s Hospital last night.

The governor?s budget proposes expanding Medicaid to give more low-income children and adults access to affordable health-care coverage, allocates more money for early childhood care and even re-establishes the Ohio State Film Commission to encourage movies to be made in the state.

He also proposes expanding the Homestead exemption for residents 65 or older and disabled residents, meaning an estimated 775,000 homeowners ? one in every four in the state ? would see an average reduction of $406 a year in their property tax bill, Tax Commissioner Richard A. Levin said.

But a debate is shaping up over Strickland?s plan to pay for that tax cut: a proposal to "sell" the state?s expected revenue in the coming years from a major tobacco settlement to generate an expected $5 billion lumpsum payment to spend now.

About $2.2 billion raised would go toward school construction, while the rest would cover the tax break and other spending in the budget.

Republican lobbyist Neil S. Clark, a budget expert and the Senate?s chief fiscal officer from 1980 to ?86, said the administration?s estimated $5 billion take from the sale of tobacco-settlement funds could be inflated.

Private bond buyers, he said, might be inclined to pay the state less if they fear that tobacco companies could walk away from the settlement once the state transfers the obligation to investors.

Clark predicted the GOPcontrolled legislature would not approve the so-called "securitization" of tobacco money without attaching stringent requirements.

He also said Republicans won?t accept Strickland?s proposed moratorium on new charter schools or his elimination of school vouchers everywhere but Cleveland, but a compromise is possible.

Retailers also have concerns about Strickland?s plan to limit a discount on the sales taxes they collect and remit to the state in a timely manner, said Lora Miller, a lobbyist with the Ohio Council of Retail Merchants.

The governor?s budget would replace the 0.75 percent discount retailers now enjoy on all taxes remitted with a discount only on the first $3,000 collected in each reporting period.

That means about 15,000 of the state?s largest retailers would lose $74 million over the two years of the budget that they now are pocketing, according to state estimates.

"It seems like every budget there has been some kind of proposal that has a negative impact on retailers in Ohio," Miller said, noting that retailers think the Commercial Activity Tax created in the previous budget affects them more than other industries.

Strickland?s budget also calls for ending the exemption from paying state sales tax that many out-of-state residents receive when they buy a vehicle in Ohio, as well as the exemption from paying tax on the first $300 in wholesale cigarettes purchased out of state and brought into Ohio each month for personal use.

Some budget observers also question how Strickland proposes to cut spending by 1.6 percent in the first year of the budget while boosting spending by 6.1 percent in the second.

J. Pari Sabety, Strickland?s budget director, said that was done to preserve funding in the second year of the budget because state revenue is expected to grow by $412 million in the first year of the budget but decline by $40 million in the second because of the tax cuts enacted in 2005.

Strickland said he?ll push to get his budget enacted without major changes.

"We?re prepared to defend our numbers, we?re prepared to defend our priorities, and we?re prepared to be advocates for the positions that we?ve taken in this budget," Strickland said.

Dispatch Senior Editor Joe Hallett contributed to this story.

mniquette@dispatch.com?