JACKSON - The Legislature will reconvene the 2009 session Wednesday to work on a budget for the upcoming fiscal year, but this year's version still has gaping holes lawmakers are struggling to fill.

Rep. Cecil Brown, D-Jackson, a key member of the House Appropriations Committee, admitted Monday that a solution has yet to be found for a shortfall in the current budget year.

The shortfall is due to tax revenue collections that are about $400 million below projections.

Before the budget year ends June 30, "it will be almost impossible to cut enough ... We don't have a plan at this point," Brown said during a luncheon meeting of the Mississippi State Stennis Institute of Government/Capitol press corps.

Gov. Haley Barbour has said that federal stimulus funds approved this year could be used to fill part of the shortfall. But that will leave fewer funds for the upcoming 2010 budget year, starting July 1, and for the 2011 budget year.

"We're talking about a huge, huge problem in 2010," Brown said. "...2011 will be worse unless there is a substantial economic recovery."

Besides stimulus funds, Brown said other "pots of money" can be used to offset low revenue collections. For instance, there is a $260 million rainy day fund.

He said state officials are limited to a certain extent on how they can use stimulus funds. A substantial portion of the funds are earmarked for uses such as Medicaid and education.

Still, he said, "The stimulus funds are an unbelievable benefit to the state. Without them, I don't know what we would do."

Despite the budget trouble, Brown opposes the $90 million tax increase on hospitals advocated by Barbour and the Republican Senate leadership. He said he would support the House compromise of $45 million.

"It would be bad public policy to tax hospitals," he added. "As a matter of the budget, it would be good policy."

As it stands, House and Senate negotiators have opted not to place any tax increase on hospitals since they cannot agree on the amount. They have agreed to increase the tax on cigarettes 50 cents, to 68 cents per pack, an increase that will bring in a much-needed additional $112 million in revenue.

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.