Christine Stuart photo

(Updated Thursday 9:30 a.m.) It took lawmakers most of the day Wednesday to reach a deal that will help erase this year’s more than $1 billion budget deficit.

The Democratically-controlled legislature came up with a $1.2 billion deficit-cutting proposal that incorporated many suggestions made by Gov. M. Jodi Rell and Republican lawmakers. However, both Rell and Senate Republicans say the package fell short of its goals.

The House passed the proposal 143 to 0 shortly before 11 p.m. Wednesday. The Senate had just started to debate the proposal around 11:20 p.m. and there was no bipartisan talks in that chamber where they voted 23 to 12 down party lines on the same package.

Republican lawmakers in the House said they would have liked to see more specifics regarding the $220 million in savings lawmakers hoped to find in dozens of “off-budget” accounts, but had faith those savings will be found since Wednesday’s agreement was reached in a bipartisan manner.

Rell released a statement early Thursday morning saying “in many ways the bill passed tonight falls short.”

Rep. Craig Miner, R-Litchfield, said he thinks the proposal “is an excellent first step,” even though some of the savings are based on “faith.”

“Today is a good day,” Minority Leader Lawrence Cafero, R-Norwalk, said.

While it wasn’t a perfect day and it certainly was a long day, Cafero complimented Speaker of the House Chris Donovan, D-Meriden, for his continued efforts to reach consensus.

The House chamber broke into applause after Cafero’s speech from the floor.

Majority Leader Denise Merrill, D-Mansfield, said it’s extremely difficult to change a budget in the middle of the year. “Tonight I’m feeling hopeful,” she said.

In addition to using approximately $373 million in federal stimulus money and more than $281 million of the $1.4 billion Rainy Day fund, the proposal asks the Appropriations Committee to find about $220 million in “off-budget” accounts.

The proposal includes money for labor savings, but doesn’t spell out any specific language to implement an early retirement program for state employees. Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, said the specifics of the plan will be negotiated by the counsel hired by the governor and the coalition of state workers. It’s unclear if the language in the bill would allow the governor to do this.

Sen. Minority Leader John McKinney, R-Southport, said Thursday morning that it doesn’t include any such language to realize the $49.2 million and the $22.1 million in anticipated labor cost savings.

“The original intention of this session was to pass a retirement incentive plan to reduce the state payroll. The deficit mitigation bill claims the savings from that plan – yet no plan was passed tonight and any such plan requires legislative action,” Rell said.

“In addition, my budget office believes that many of the ‘fund sweeps,’ intended to transfer $220 million into the General Fund, cannot happen because the money is either not there or is restricted to certain uses – and the majority Democrats know this very well.,” Rell said.

The proposal eliminates the budget deficit for fiscal year 2009, but does not help lawmakers close the estimated $8.7 billion deficit for the following two fiscal years.