By Kim Chandler | The Associated Press

MONTGOMERY (AP) — Legislators on Tuesday tried to break through deadlock on how to use nearly $1 billion in settlement money the state will receive from the 2010 oil spill in the Gulf of Mexico.

State senators have been split over how to use the money, with some lawmakers pushing to fund road projects in coastal counties and others saying the money should address a looming financial crisis in the state’s Medicaid program and repay money borrowed in past budget shortfalls.

“I think people are pretty much where they were when we left last week,” Senate President Pro Tem Del Marsh, R-Anniston, said.

Legislators have so far found little common ground in a special session called by Gov. Robert Bentley on a proposed state lottery and other ways to try to get additional money to the state’s perpetually cash-strapped Medicaid program. With the lottery bill dead for the special session, the oil spill settlement bill took center stage in what could be the final day of the special session.

Alabama’s general fund is getting $1 billion over 18 years to compensate the state for economic damages sustained from the spill that spewed millions of gallons of oil into the Gulf of Mexico. The state has $850 million in payments remaining, and lawmakers are considering taking a smaller amount up front — a projected $640 million— by doing a bond issue.

The divisions were on display Tuesday as senators began debate on a House-passed bill that would allocate $450 million for repaying state debts and $191 million for two state road projects in coastal counties. Paying debt early would free up about $70 million and help fill a projected $85 million hole in next year’s Medicaid budget.

Some senators on Tuesday sought to eliminate the road money entirely and send the money to Medicaid. Arthur Orr, R-Decatur, said Medicaid is facing at least a $165 million shortfall in the following fiscal year.

“We are fast approaching a fiscal cliff in Medicaid,” Orr said.

Orr proposed to send $300 million to Medicaid over the next three years and use $320 million for debt payment.

Lawmakers from south Alabama have been adamant that they won’t take less, or at least not much less, for the road projects.

“The course of the bill is sadly off course because it doesn’t address any of the damage that was done to the coast,” Sen. Bill Hightower, R-Mobile, said.

The Senate is expected to debate the bill into the evening. Marsh said the hope is to get a bill through the Senate on Tuesday and onto a conference committee.

Rep. Steve Clouse, the House sponsor of the bill, said last week that he did not think the House would accept many changes to the bill.

Some lawmakers said it was possible they might adjourn the session on Tuesday, with or without an agreement. “I think today is the last day. Whatever is going to happen, is going to happen today,” Marsh said.