JACKSON — Mississippi lawmakers agreed Friday on how much the state will spend for kindergarten through graduate school for the year that begins July 1, and they'll restart negotiations next week on an overall $5 billion state budget.

The biggest disagreement between the Democratic-controlled House and Republican-led Senate is still over how much to tax hospitals to help pay for Medicaid, the government health insurance program for the needy.

Among the new developments in budget talks Friday, negotiators said an additional tax might be considered on inexpensive cigarettes. That would be on top of the 50-cents-a-pack increase that took effect on all cigarettes May 15.

Negotiators also said they want to give permission to the state auditor and Tax Commission to auction about a million packs of contraband cigarettes seized by federal and state agents in a raid several weeks ago. Officials estimated the auction could bring the state $5 million to $10 million.

Gov. Haley Barbour will call the full House and Senate back to the Capitol for a special session once the negotiators have agreed on a budget outline.

"I will be surprised if we have an agreement as early as the first of next week, but I'll be surprised if we don't have an agreement before the end of the month," Barbour told The Associated Press in an interview Friday from New York.

Some lawmakers are criticizing Barbour for traveling out of state with the budget unresolved. Barbour will attend the annual Mississippi picnic in New York on Saturday, then catch a commercial flight to Europe for an economic-development trip to the Paris Air Show. He said he'll return next week, but he's not sure what day.

Only a governor can call a special session. When Barbour is out of state, Lt. Gov. Phil Bryant is acting governor. Barbour said his legal staff is researching the procedure for allowing the acting governor to set the special session — but he said he didn't think that would be necessary.

Fewer than a dozen legislators are deeply involved in the negotiations, but all 121 House members and 52 senators will get a chance to vote on spending bills.

Mississippi lawmakers usually finish a budget by early April, but they gave themselves more time to work this year because they wanted to see how the federal stimulus package will affect state government. State agency directors and local school administrators are nervously watching the calendar as the new fiscal year approaches.

"I'm trying to push us together to stay at this until we get it done," House Speaker Billy McCoy, D-Rienzi, said Friday as he and two House negotiators met with two of their Senate counterparts.

They agreed to spend nearly $2.6 billion in the coming year for elementary and secondary education — a slight increase from the current year. That includes full funding for the Mississippi Adequate Education Program, a complicated formula designed to ensure that each school district receives enough money to meet state accreditation standards. Negotiators also agreed to set aside enough money to pay for the $6,000 annual salary supplement for each teacher who completes a rigorous series of projects and examinations to earn national certification — a top ranking in the profession.

Barbour wants lawmakers to set a hospital tax that would generate $90 million a year to help pay for Medicaid. Hospital executives say the tax would hurt their finances, but patient advocates say the expense would be passed along to sick people.

Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, said Friday that he wants to set the hospital tax at $60 million a year. McCoy said the House is unwilling to go above $57 million.

On tobacco, Barbour is proposing additional excise tax of 22 cents a pack for inexpensive cigarettes made by companies that did not participate in Mississippi's 1997 settlement of a massive lawsuit against makers of premium cigarettes. He also wants to change the method of taxing smokeless tobacco, but negotiators on Friday were not discussing that part of his plan.

Mississippi's cigarette excise tax for all brands jumped to 68 cents a pack last month. It had been 18 cents a pack since 1985.

Barbour, a former tobacco lobbyist in Washington, had long opposed increasing Mississippi's cigarette tax because he said he didn't want to increase any type of taxes. A commission he appointed to study the state tax structure last year recommended an increase in the cigarette excise tax. Based on that recommendation, Barbour supported the increase this year.

Meanwhile, the state's proposed auction of seized cigarettes has been approved by federal officials, an auditor's spokeswoman said. If the cigarettes are not auctioned by the state, the federal government could destroy them.