Budget cuts and tax increases are the logical results if state legislators don’t pass a hospital tax to address the Medicaid shortfall when the Mississippi Legislature reconvenes Tuesday, state Sen. Briggs Hopson III said.

Lawmakers will consider the government-run health program as part of talks on the budget, with the shortage in the Division of Medicaid taking prominence.

The program serving about 600,000 of the state’s residents is up for reauthorization and will expire June 30 without legislative action. A $90 million hospital tax has been proposed by Gov. Haley Barbour and the Division of Medicaid.

Much like the cigarette tax, passed last week after three years of haggling among the governor and both chambers, House and Senate leaders are at an impasse on how much of a tax is necessary. Appropriations chairmen in both chambers have weighed competing ideas — such as a House offer of a $53 million hospital tax and a Senate proposal to put $60 million of the state’s expected federal stimulus money into a reserve fund for 2011. Each group has rejected the other’s.

“No one wants to see a hospital tax,” Hopson said, addressing the Vicksburg Lions Club on Wednesday. “But, if we don’t get some tax, the question is what are we going to cut?”

Hopson, R-Vicksburg, ruled out any support on his part for tax hikes of any kind instead of a levy on the hospitals. At the same time, hospital associations appeared to have settled on at least $45 million as one the industry can tolerate, Hopson said. Barbour calls for the full amount, insisting the action merely reinstates a fee hospitals paid to participate in Medicaid until granted relief in the aftermath of Hurricane Katrina.

House leaders have said the Senate plan to delay spending some of the federal money will not be allowed by federal authorities because the stimulus allocation must be spent immediately. Word on the legality of the reserve fund proposal is expected to come from the federal government.

The state’s 50 cents-per-pack hike on cigarettes headed off what would have been a hit to the taxpayers on car tag fees, Hopson said. Mississippi’s total tax of 68 cents now ranks 16th from the bottom in terms of taxation after many years of being third-lowest.

For two years, the approximately $113 million estimated to come from the hike will go to shore up the fund that reimburses counties to ensure some type of discount on car tags, treated as an ad valorem property tax in Mississippi.

Had a compromise not been reached on the tobacco excise tax, tag fees “probably would have doubled, maybe more,” Hopson said.

Forecasts on education funding may be about $20 million less as a result of federal stimulus money going to shore up federal incentive grants and special education, Hopson said, referencing areas not handled by the state.

On other issues handled by the Legislature thus far, Hopson said he’d support a voter identification bill and might sponsor his own eminent domain bill next year. Both died in committee after contentious debate.

Consideration of industrial expansions at locales such as port facilities and airports must factor into next year’s eminent domain debate, while the first-term senator for District 23 said he would come out in opposition to early voting because voters can already vote early by casting absentee ballots.

“It would put too much pressure on the (circuit) clerks,” Hopson said.

Local-interest bills were not likely to be considered during the upcoming session due to time constraints, Hopson said. Vicksburg had expressed interest in filing a bill tied to investing in a project to suspend turbines in the Mississippi River. Other locally generated bills passed included permission to the Board of Supervisors to fund 13 nonprofit agencies and allowing certain exceptions for the fair-market value requirement when entities purchase real property with public funds.

As for the local job market, one weathering lingering effects of the national recession and several corporate departures from Vicksburg and Warren County in recent years, Hopson said the quality of the work force is paramount.

“We need to do a better job in our community in making sure we’re prepared to work and that we’ve got good people,” Hopson said. “I think we in Vicksburg and Warren County have a problem with apathetic workers.”

Unemployment rates stood at 9.4 statewide and at 9 percent nationally in March. The rate was 9.2 percent in Warren County, up a tad from 9 percent in February.

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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com