(Updated: 5 p.m.) Hours before the end of the regular legislative session, Sen. President Donald Williams, D-Brooklyn, announced that his caucus was in favor of holding a special session this summer to address the real estate conveyance tax, which will sunset if lawmakers are unable to pass a bill to extend it by midnight tonight.

Williams said Wednesday that his caucus is “worried about driving up property taxes.”

The real estate conveyance tax levied on homeowners selling their homes brings in about $40 million in revenue to cities and towns across the state. Cities and towns love the tax because they can use it to reduce the local property tax burden. Real estate agents hate the tax because they say it takes sellers by surprise at closings.

Speaker of the House James Amann, D-Milford, met with Williams Wednesday afternoon and it looks like a special session is possible, but they were still working out the details. A call to special session has to be very narrow and only the items listed in the call can be debated. 

Minority Leader Lawrence Cafero, R-Norwalk, said “they should run the bill now.”

Cafero said if the session adjourns tonight without a bill on the conveyance tax,” They’ll have no one to blame but themselves.”

On Tuesday Republicans tried six times to force a floor debate on their plan to revise the fiscal year 2009 budget.

Democratic lawmakers know if they run the conveyance tax that Republicans will try to attach their budget amendment to the bill. Late last week Democratic lawmakers and Republican Gov. M. Jodi Rell agreed to use the $18.4 billion budget they passed last year.

Republicans want to run their own budget proposal, which includes an early retirement plan for 4,200 state employees. Republicans say an early retirement plan will create $163 million in savings, which could be used to increase spending in certain areas and reduce taxes in other areas. Both Democrats and Rell doubt those savings could be realized when pension and health insurance costs are calculated.

The GOP budget keeps the same bottomline, but closes the deficit and makes modest changes to town aid, nursing homes, and nonprofit social service agencies. It also eliminates the schedule July 1 increase in the gas tax, eliminates the business entity tax and phases out the estate tax paid by the state’s wealthiest citizens.

“All of this to avoid a one hour debate,” Cafero said.