By Bobby Harrison

Daily Journal Jackson Bureau

JACKSON - Even as legislators struggle with financial shortfalls, Gov. Haley Barbour and Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, are saving money for the Legislature to spend during the 2010 session.

In his budget proposal, Barbour "captures" $93 million in federal stimulus funds to be appropriated during the 2010 legislative session.

The stimulus package was passed by Congress and signed into law by President Barack Obama earlier this year. Part of the funds are designated to the states to help with budget troubles caused by slumping state tax collections during the current recession.

Budget woes have caused the 2009 session to be extended past its scheduled April 4 conclusion. The Legislature is currently in recess as Nunnelee, House Appropriations Committee Chairman Johnny Stringer, D-Montrose, and other key members try to craft a compromise on how and where to use funds.

In his budget proposal, Nunnelee sets aside $60 million. But he said that money is state revenue and not federal stimulus funding.

All agree that the budget picture during the 2010 session could be even bleaker than it is now, especially since most of the federal stimulus funds are supposed to be spent midway through that budget year.

"We can plan for that or ignore it," Nunnelee said.

Stringer acknowledges the budget outlook for the 2010 session is grim, but he added, "we don't know what the economy is going to do. Many experts are predicting it will turn around this year.

Stringer does not set aside any money for 2010 other than what is in the state's rainy day fund.

The rainy day fund has about $360 in it. Legislators have agreed to spend $95 million in the rainy day fund for the upcoming year to help ease the budget crunch.

At the same time they are spending $95 million from the rainy day fund, Barbour wants to save $93 million and Nunnelee wants to set aside $60 million.

Stringer said that would be equivalent to creating another rainy day fund.

"The stimulus guidelines say you can't start another rainy day fund," Stringer said.

Barbour said federal officials have agreed that it is OK to set aside federal stimulus funds designated for Medicaid to be used at a later date.

Barbour and Nunnelee said their setting aside of funds at the same time they are advocating a tax increase of $90 million on hospitals is not related. House leaders have opposed the hospital tax, though they have said they will agree to a $53 million increase as a compromise.

In recent days, Nunnelee has agreed to drop his proposal to a $60 million increase - the same amount he is planning to save.

"I think it is a coincidence the two numbers are the same," he said. Asked if the money he is setting aside could be used in place of the tax on hospitals, he said, "We need to solve Medicaid now."

He added that Medicaid has had a shortfall for years that has been plugged by various sources of one-time money. A hospital tax increase would plug that hole permanently, he said.