A small group of Mississippi lawmakers will be at the Capitol next week to restart their stalled discussions about a cigarette tax increase.

Gov. Haley Barbour, meanwhile, met privately with House and Senate leaders Wednesday to discuss some new suggestions he has for state spending in the fiscal year that begins July 1. Barbour said his budget is based on the assumption that legislators will approve a $90 million annual hospital tax to help pay for Medicaid and that they’ll set a cigarette excise tax of 60 cents a pack.

Democratic House Speaker Billy McCoy of Rienzi said the Republican governor’s cigarette tax proposal is too low and the hospital tax for Medicaid is too high.

“Obviously, he’d rather put the burden on the backs of families with sick in hospitals than levy a substantial amount on what public health officials say causes a high expenditure for health problems,” McCoy said.

The entire House and Senate met nearly three months before leaving the Capitol on April 1. Both chambers will return in May or June to finish writing a state spending plan. Officials wanted a few weeks to evaluate how the federal stimulus package might affect Mississippi government.

Lawmakers must agree on the amount of a cigarette tax increase or decide to ditch the proposal so the budget can be finished.

One of the leading tax negotiators, House Ways and Means Committee Chairman Percy Watson, said Wednesday he believes the lingering dispute over the amount of the cigarette tax is “a fight that is being promoted by the tobacco industry.”

Watson, D-Hattiesburg, said he doesn’t believe the average smoker is hung up on whether the tax will be 64 cents, 65 cents or some other amount.

Mississippi’s current cigarette excise tax of 18 cents a pack is the third-lowest in the nation. Some legislators are looking at an increase as a way to generate more money for the state budget. Others want to make cigarettes more expensive to deter young people from smoking.

The House started this year trying to set the tax at $1 a pack, and the Senate started at 49 cents.

The Senate has gone up to 64 cents a pack for premium brands and 84 cents a pack for generics. House negotiators have gone down to 75 cents a pack for all cigarettes.

State Auditor Stacey Pickering announced Wednesday that investigators this week locked down a warehouse with about 1 million cartons of “contraband” cigarettes and small cigars that had not been properly marked with a state tax stamp. He said officials were still trying to determine where the products were supposed to be sold.

After learning about the auditor’s announcement, Senate Finance Committee Chairman Dean Kirby, R-Pearl, said he hopes contraband cigarettes will not become more common if Mississippi increases its tobacco tax.

“I feel that people, if we go too high, will start ordering online without paying any tax or will go to other states to buy cigarettes,” said Kirby, the top tax negotiator in the Senate.