JACKSON, MS (WLOX) - House and senate negotiators agreed Friday to end talks on a possible hospital assessment tax after they failed to reach a compromise.
Proposals for how much to take from hospitals had varied widely, from no tax at all, up to $90 million a year. Gov. Haley Barbour said it's only fair for hospitals to start paying a tax again, since they paid a similar one until 2005.
Senator Alan Nunnelee said a state budget without a hospital tax would leave the Division of Medicaid short by millions, and that leaves only two options.
"We can assess other state agencies, or we can cut Medicaid spending," Sen. Nunnelee said.
Sen. Nunnelee's original budget proposal, without a hospital tax, cut some state agencies up to eleven percent. He also wants to carry over $60 million in Medicaid funding from the 2010 budget to save for fiscal year 2011.
"The issue is are we willing to make difficult choices today in order to avoid some impossible dilemmas in 2011?"
Some house members say Nunnelee's suggested cuts are more than just "difficult." They're unacceptable.
"They're talking about laying off doctors, nurses. Cutting the Health Department when we have the swine flu in the state. Mental health, gonna turn mental health patients out on the street. Lay off highway patrolmen. The House refuses to do that," said Representative Johnny Stringer, (D) Montrose.
The state has nearly a billion dollars in reserve funds. The house wants to see ten percent of that used to balance this year's budget.
"We have $939.4 million in reserves," said Stringer.
And with the full legislature still scheduled to return next Tuesday, house and senate negotiators are expected to work through the holiday weekend to find some common ground for a balanced budget.
The new budget year begins July 1.