PHOENIX - Arizona voters may be asked a second time this year to raise their own taxes, this time to keep the state from reducing the number of people who get free health care.

The Arizona Hospital and Healthcare Association is working with consultants on an initiative it hopes will make it to the ballot in November. It would raise money to stop the state from cutting more than 310,000 people from the Arizona Health Care Cost Containment System, the state's Medicaid program.

Exactly what form the proposed levy would take has yet to be worked out. Laurie Liles, the association's lobbyist, said consultants and pollsters are looking at what kind of tax would be most palatable to voters. Historically, voters have been particularly receptive to taxing cigarettes; the total levies on those are now $2 per pack.

"We do think that we need a long-term solution," Liles said in an interview. "And that will likely involve some type of dedicated funding stream," meaning a tax. Time is running out: Backers would need to gather 153,365 valid signatures by July 1 to put the measure before voters this year.

Liles said it would be a mistake for lawmakers to simply slash AHCCCS funding because of the state's financial crisis. The cuts would have ripples throughout the state economy, she said.

But Liles said she understands the conclusion by Gov. Jan Brewer and Republican legislative leaders that next year's anticipated $2.7 billion deficit leaves them with few options to pay for all of the 1.3 million people who now get care from AHCCCS.

Cutting the AHCCCS enrollment would save the state $385 million in just the first six months. That means any new source of cash would have to generate at least $770 million a year.

By contrast, the governor's proposed 1-cent increase in the state sales tax - a measure voters will decide in May - would generate about $950 million in its first year. The AHCCCS cuts will take place even if that is approved, as the cash from that levy is earmarked for other programs, mainly aid to education.

Liles said she doesn't believe that voters, perhaps having just approved a higher sales tax, will be averse to another increase. "I believe the voters do not support cutting AHCCCS. And I believe the voters will agree to support some type of tax increase to preserve AHCCCS," she said.

The first half already has been proved: Voters mandated in 2000 that the state provide free care for everyone below the federal poverty level. That now translates to about $18,310 for a family of three.

But the measure was sold, at least in part, on the promise that much of the increased state cost would be borne by Arizona's share of the nationwide settlement with tobacco companies. That money this year totals only about $118 million.

A plan approved Tuesday by the House and Senate Appropriations committees would cut the AHCCCS enrollment of nearly 1.3 million back to what that tobacco settlement money would fund; the 310,000 people who would lose coverage are the difference.

Liles said more than care for these people is involved. Her group funded a study that concluded the cuts to AHCCCS ultimately would result in the loss of 42,000 jobs.

The hospitals also have a financial interest in the issue. Fewer people enrolled in AHCCCS means more Arizonans without health insurance. Liles said many are likely to wait until their conditions become serious - and expensive to treat - before showing up in hospital emergency rooms. And federal law bars hospitals from turning away people in life-threatening situations, regardless of their ability to pay.

But Liles said that should be of concern to businesses, as any unreimbursed costs they incur would be passed along to those who can pay, including the insurers who provide coverage for private companies.