AUSTIN -- Faced with a shortfall of up to $90 million in money already spent from the state's tobacco settlement, lawmakers must decide whether to cut programs or shuffle revenue from other sources to make up the difference.

According to a report made public yesterday by a Senate subcommittee studying the state's $17.3 billion settlement with the nation's largest tobacco companies, a huge drop in cigarette consumption is translating into a shortfall in revenues to the state in 2000- 01. Under the 1998 agreement, payments from the companies are tied in part to tobacco sales. Last year, anticipating $1.8 billion from the tobacco companies in the two-year budget period that began Sept. 1, 1999, and ends Aug. 31, 2001, lawmakers set up eight permanent trust funds and 13 higher- education endowments for a variety of long-range health care initiatives. Combined, the interest-bearing funds and endowments took $1.49 billion of the expected revenues.

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