Top Mississippi lawmakers decided Wednesday they will cobble together a nearly $5 billion state budget without using a proposed $90 million hospital tax to help fund Medicaid.

One money-minder said he believes it’s premature to rule out the hospital tax because lawmakers can’t balance the state budget without it.

Rep. George Flaggs, D-Vicksburg, said Wednesday’s meeting where a half dozen House and Senate negotiators decided to walk away from the hospital tax was “a dog-and-pony show.”

Flaggs was not directly involved in those talks, but he is a member of the Joint Legislative Budget Committee, the elite group that has the biggest influence over how state tax dollars are spent.

“Bottom line is, we’re going to have to agree on the $45 million (hospital) tax, drop our position on face-to-face and move forward with Medicaid,” Flaggs said. “It’s a win-win for the Senate for the House and for the governor. It’s a win-win-win.”

Democratic House leaders have been pushing to eliminate the requirement that Medicaid recipients go to a state office for a “face-to-face” annual re-enrollment. Republican Gov. Barbour says the plan reduces fraud, but opponents say it creates burdens for poor people.

Barbour has been saying for more than a year that there’s a $90 million shortfall in Medicaid, the government health program for the needy, aged, blind and disabled and for low-income families with children.

Barbour is urging legislators to restructure and revive a tax that hospitals paid for about a dozen years to help fund Medicaid.

For every dollar Mississippi puts into Medicaid, the federal government spends about $3. So, a $90 million state shortfall translates into a $360 million loss when federal money is included. The hospital tax had been used to pay for some of the state’s share to bring in federal dollars.

The federal government told Mississippi to stop using the hospital tax in 2005. Since then, state officials have used a variety of sources to help cover the shortfall, including federal hurricane recovery money that was designated for Medicaid.

Some lawmakers say there’s plenty of federal stimulus money to pay for Medicaid without cutting patients’ services during the fiscal year that begins July 1. Others are skeptical.

“We don’t need the hospital sick tax,” House Appropriations Committee Chairman Johnny Stringer, D-Montrose, said Wednesday.

Barbour said this week that his overall state budget plan is built on the assumption that lawmakers will approve the $90 million hospital tax.

“I think the most important thing is for all the legislators to understand all their options,” Barbour said Tuesday. “We’re going to have a certain amount of money, and that’s all we can spend.”

Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, said Wednesday that some agencies’ budgets might suffer because the hospitals won’t be taxed for Medicaid. Nunnelee has been pushing for the governor’s position on the hospital tax.

“We’re either going to have to fill that $90 million with an assessment from hospitals or an assessment from other agencies,” Nunnelee said. “Or the third option is to cut Medicaid by $360 million. Those are the only three options available.”

Mississippi lawmakers return to the Capitol on May 6 to finish writing a state budget for the year that begins July 1. They were in session from early January until April 1.

They took a few weeks’ recess to evaluate how the stimulus money will affect Mississippi government and to finish working on the Medicaid hospital tax and an increase in the cigarette tax.

A half-dozen negotiators agreed Tuesday on a proposal to increase the cigarette tax from 18 cents a pack to 68 cents. That plan is expected to come up for a vote of the full House and Senate next week.