JACKSON - At least two of the three House budget negotiators inched closer to the position of their Senate counterparts Wednesday by agreeing to a $60 million tax increase on hospitals.

Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, has proposed a $60 million increase for this year. However, has said he supports the $90 million hospital tax recommended by Gov. Haley Barbour.

The budget negotiators are haggling over how much to increase the tax on hospitals to help solve budget problems caused at least in part by a slowdown in state tax collections during the current recession.

"I'm really against taxing hospitals, but we're to that point just to get a budget together," said House Appropriations Committee Chairman Johnny Stringer, D-Montrose.

Another House negotiator, Dirk Dedeaux, D-Gulfport, said he is not sold on moving beyond the $45 million tax increase the Mississippi Hospital Association had said it supports. But it would take only two House negotiators to sign off on an agreement and present it to the full chamber for consideration.

While two of the three House negotiators agreed to a larger tax increase, they said they are adamant that language be put in legislation preventing the Division of Medicaid from making changes that cost health care providers, such as hospitals, additional money.

They said it would not be right to tax them and then reduce payments for the services they provide to Medicaid recipients since those payments already do not cover their full costs.

Nunnelee said the ability to make the cuts to providers might be needed because it appears that the Legislature might underfund Medicaid as part of any budget agreement.

But Stringer said he believes money can be found to ensure Medicaid is fully funded. For instance, the state is in line to receive an additional $22 million in federal stimulus funds if unemployment continues to climb as expected.

The negotiators hope to finish in time for the full Legislature to vote on a budget proposal when it returns Tuesday. They are working on how to divvy up about $5 billion to fund various aspects of government, including public safety, education and health care, starting July 1.

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