No Budget Deal in Sight

After two hours of meetings on Tuesday, it does not look like the state is much closer to agreeing on a plan to close a $8.56 billion budget deficit.

Last week, Gov. M. Jodi Rell and Democratic leaders put out separate budgets that were vastly different. Tuesday was their first meeting since revealing just how divided they are on fixing the fiscal problem.

After the meeting, both sides said it was important that they sat down for the first time since revealing those latest plans.   

Rell's plan would increase taxes by nearly $400 million and make major spending cuts.  

Democratic leaders are offering a plan that would avoid many of the governor's cuts, but it would also raise taxes by $1.8 billion, most of which would come from increased taxes on the state's wealthiest residents.

Democratic leaders left the meeting saying that several of Rell's cuts are inappropriate, and are in some ways cruel to senior citizens, the disabled and people of very limited means who would have to pay more.

Rell says state residents cannot afford $1.8 billion in new taxes, and that the fiscal year that ended June 30 with a deficit of $1 billion still must be dealt with. 

One major problem with the budget impasse, Rell said, is that virtually all of the state's rainy day fund will have to be depleted to pay off that shortfall if there is no agreement by Sept. 1. 

Rell and other Republicans say that's $1 billion that won't be available to help deal with the $8.56 billion dollar shortfall estimated for the next two fiscal years.

Fiscal experts and some lawmakers will be held over the next few days but there is no full-scale meeting between the governor and  Democratic legislative leaders until Monday.

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