The new budget year starts July 1, Medicaid is $90 million in the hole and Gov. Haley Barbour and key lawmakers appear deadlocked over how to pay for the program.

Barbour criticized House leaders Thursday for not approving a deal that would restructure hospital taxes to fill the budget gap to provide health coverage for the needy.

The Republican governor said he met earlier in the day with House Speaker Billy McCoy and other Democratic House leaders, who have so far blocked a plan that has passed the Senate 41-7.

“The House has failed to do its job,” Barbour said during a news conference.

McCoy blamed the failure to reach a deal on Barbour’s unwillingness to compromise.

“Right now as of this minute we have a stalemate,” McCoy said in a phone interview.

McCoy and other House members say the plan would force hospitals to pass increased costs on to patients with private insurance. Barbour counters that the plan will help the hospitals and the public, saying for every dollar the hospitals pay in state taxes they’ll get $6 back in federal money.

The Division of Medicaid and the Mississippi Hospital Association have endorsed the plan.

Lawmakers are scheduled to come back to Jackson next week to continue a special session that began last month and has been on hold since June 4. House leaders want to plug the hole in the Medicaid budget with a tobacco tax. But the governor controls the agenda during a special session and a tobacco tax is not on the table.

“The governor wants to tax sick patients,” said Rep. George Flaggs, D-Vicksburg, who attended Barbour’s news conference. “The House wants to tax the cigarette companies.”

Barbour scoffs at a cigarette tax, saying lawmakers over the years have proposed 19 different uses for tobacco money and failed to pass a cigarette bill in the last regular session.

Barbour says he’s waiting for his tax study group to recommend the best use for tobacco money and will consider a tax increase next year — but only if other taxes can be lowered.

Still, House leaders hope to force Barbour’s hand on the tobacco tax in the special session by blocking his Medicaid bill, which would fully fund the health care program for the needy, aged, blind and disabled and for low-income families with children. About one of every four Mississippians is enrolled in the program.

Barbour says he is bound by the state constitution to begin making cuts in the Medicaid program if the funding isn’t there by July 1. Because the federal government matches Medicaid dollars, the $90 million shortfall could balloon.

“The remaining purpose of this special session is to enact a fair, permanent, sustainable method of fully finding Medicaid,” Barbour said. “This is a critical mission to fully fund Medicaid and live within our constitution, which requires a balanced budget.”

Flaggs said Barbour won’t cut programs. And, Flaggs said, the House could put more money into Medicaid in January during the regular session if Barbour does make the cuts.

“The minute we can eliminate the politics — the ego — we can do what the taxpayers want us to do and resolve this,” Flaggs said.

In the meantime, House leaders say they will continue to work with Senate leaders and try to bypass the governor and strike a deal.