Christine Stuart photo
Gov. M. Jodi Rell (Christine Stuart photo)

Gov. M. Jodi Rell struck an upbeat note on the state of the economy when she addressed business leaders Wednesday.

Rell said that while the state has lost jobs, “it’s not as bad as we thought it would be.” She said there also are new jobs being created in the state, mostly in the film industry.

Turning the economy around may take longer than we hoped, “but we will get through it,” Rell said. However, her optimism may not mean much to the growing list of Connecticut’s unemployed.

The Connecticut Department of Labor reported on Friday that unemployment claims for the two-week period ending Feb. 21 averaged 92,956, up 1,201 or 1.3 percent from the previous period. For the two-week period ending Feb. 7 unemployment claims averaged 91,755, down 1,899 or 2.0 percent from the previous period.

Rell told business leaders that she has tightened the state’s purse strings by implementing a hiring freeze, travel ban, and most recently a moratorium on purchasing office supplies.

She said that she is doing for the state what business leaders are doing for their companies.

When it comes to the state budget, tax revenue from the casinos is not down as much as was projected, while tax collection is coming in at the anticipated levels, Rell said. “If that’s the trend, it’s not as bad as it could have been with all the bad economic news that’s out there.”

Will layoffs of state employees be necessary?

“We really have been trying very hard to avoid layoffs at all costs,” Rell said. “But there are going to be very few options in the future … I’m not going to rule it out.”

Rell said talks with union leaders about concessions are proceeding slowly.

The deficit mitigation plan Rell signed Tuesday and which was passed by the General Assembly last week included savings from a retirement incentive package, but no language authorizing such a package. Rep. John Geragosian, D-New Britain, says the legislature expects Rell to negotiate those savings directly with the unions.

Rell said that if she’s unable to achieve those savings before June 1, there will be an $11 million hole in the deficit mitigation plan she signed yesterday. She said she expects she will need to submit another deficit mitigation plan to the legislature in the coming months.

“I think we all agree that the deficit is still there and the deficit will continue to grow,” Rell said.