HARTFORD, Conn. (AP) -- Now that state lawmakers have gone home, it's up to Gov. M. Jodi Rell to deal with Connecticut's newfound deficit problems.
Democrat leaders of the General Assembly and Rell, a Republican, agreed to stick with the $18.4 billion budget approved last year for the new fiscal year that begins July 1, and not make any changes given the state's slowing revenues.
That means Rell will have to keep the tax and spending plan in balance, using her limited powers to cut spending and calling on commissioners to be frugal. It marks the first in her gubernatorial career that she's faced a deficit and the prospect of making reductions that could upset many people.
``She's the leader of the state and I believe as leader of the state, she will make the tough decisions necessary to keep the budget in balance,'' budget director Robert Genuario told The Associated Press.
Earlier this month, state Comptroller Nancy Wyman predicted the state would end this fiscal year about $70 million in deficit, due in part to slowing income tax revenues. It was a sharp departure from the $263 million surplus projected earlier this year.
Genuario said the good news is the current fiscal year deficit will likely be covered without tapping the state's budget reserve fund. Because the General Assembly did not pass a new budget bill, leftover money in some state accounts will not be automatically carried into the new fiscal year.
That means, he said, the money will cover the deficit and there will possibly be a small surplus in the end.
But the new fiscal year is at least $40 million to $100 million in the red, Genuario said. And that's the budget Rell will be concentrating on in the coming weeks. Meanwhile, Rell is working to find $10 million to cover a major criminal justice reform bill that calls for hiring additional prosecutors, probation officers and other staff.
House Speaker James Amann, D-Milford, said lawmakers are banking on Rell's ability to find that money within the budget to fund the legislation, which stems from two deadly home invasions in Cheshire and New Britain.
``We'd encourage her to keep that commitment in place,'' he said.
But Amann said he understands that leaving the budget untouched means that Rell will likely have to make some cuts.
``In a tough economy, I can't argue with her,'' he said.
Rell's budget-cutting powers are limited. She can rescind up to 5 percent of any appropriation and 3 percent of any fund, such as the General Fund. Yet the governor is barred from reducing municipal aid and entitlements.
She has already ordered cutbacks in discretionary spending at state agencies and issued a ban on out-of-state travel for personnel. And despite strong opposition from her fellow Republicans in the legislature, Rell supports the idea of keeping the original budget in place even though she'll now be the one making any necessary cuts.
``Our first order of business is to maintain the services in our state, to cut where necessary,'' Rell said, adding that ``We are prepared to make rescissions as quickly as possible.''
Rell appears optimistic she can keep the budget balanced without having to lay off state employees or immediately implement money-raising ideas such as an early retirement incentive program for state workers or a tax amnesty program that would encourage delinquent taxpayers to pay up their bills.
Legislative Republicans have lobbied for an early incentive program, while Senate Democrats suggested the tax amnesty. Genuario said Friday that both ideas are ``tools'' that Rell might have to use should the deficit problems worsen and revenues plummet.
But at this point, she plans to focus first on scaling back spending.
Genuario said if the governor decides to rescind spending because of weak revenues, she can always reverse that decision months down the road if the economy improves.
``I think it's important to get an early start,'' he said, ``and get a plan in place.''
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