Christine Stuart photo

(Updated: Friday) Republican Gov. M. Jodi Rell called a press conference Thursday afternoon to announce that she is presenting an additional $1.3 billion in budget cuts for fiscal years 2010 and 2011.

She also proposed borrowing $965 million to close this year’s budget deficit and will expand the game of Keno to help create a new revenue stream for future years. “Both of these are moves I would prefer not to take, but I have no choice,” Rell said.

“This new budget makes deeper, more painful spending cuts,” Rell said. “I’m not looking for a battle, but I am willing to fight one because I believe it is a battle worth fighting.”

Like her initial budget proposal on Feb. 4, Rell’s supplemental budget does not include any tax increases or reductions in municipal aid, but it makes a number of cuts and keeps all of her original fee increases. Some of the cuts include closing four more courthouses making it six total, suspending funding for a number of social service programs, reducing nursing home funding, and closing the J.M. Wright Technical High School and the Bristol Technical Education Center. Click here to read the details of the spending cuts or here to listen to the entire press conference.

The legislature’s Democratic majority have been calling on Rell to submit a supplemental budget since February when its budget analysts predicted that the size of the deficit was $8.7 billion, not the $6 billion deficit she closed on Feb. 4.

The supplemental budget Rell presented Thursday closes a $7.95 billion budget deficit for fiscal years 2010 and 2011.

Rep. Cameron Staples, D-New Haven, said that still falls about $1.5 billion short of the budget deficit the Office of Fiscal Analysis has predicted. He said the Democrats have been waiting all session to see Rell’s new plan.

Rep. John Geragosian, D-New Britain, said he was disappointed when Rell’s administration walked away from the negotiating table Wednesday.

Budget talks stalled Wednesday when word spread that the Senate Democrats planned on introducing an amendment, which would spell out how a budget consensus should be reached when the two sides have different budget estimates.

As for the types of cuts in Rell’s proposal Thursday, Geragosian said, “We’re not going to make irresponsible cuts on the backs of the poorest Connecticut residents without asking the wealthy residents for more.”

Geragosian is referring to a progressive income tax for those making more than $250,000 per year. He said he doesn’t think it’s too much to ask someone making that much to pay an additional $300 a year, so that social service programs serving the most state’s neediest residents continue.

“I am not going to discuss any additional revenue until such time I know that all spending cuts have been put on the table and have been exhausted,” Rell said when asked if she would veto a budget including tax increases.

Majority Leader Denise Merrill, D-Mansfield, said Rell made some very serious and scary cuts. “She got there with some pretty Draconian cuts,” Merrill said.

However, Merrill pointed out that Rell also took some of the suggestions Democrats have made, such as self-insuring the state employees and retirees health insurance pool, a stance Rell’s administration has railed against over the past few months.

Merrill said she hopes negotiations will start again soon.

“Gov. Rell has proposed a budget that, if enacted, would have devastating consequences for Connecticut families and businesses. Not only does it fail to close the true deficit, it threatens the health and safety of our children, elderly and disabled by shredding the social safety net they rely on,” Sen. President Donald Williams, D-Brooklyn said.

“Still, within the plan are some worthwhile cost cutting proposals that deserve consideration. It is our hope that the Rell administration – having broken off budget negotiations yesterday – will now return to the table,” Williams added.

Keno

Rell’s Budget Secretary Robert Genuario said the state expects to raise $20 million in the first year and $60 million in the following years by expanding Keno. The revenues from Keno would be securitized over 10 years, which means the state would be borrowing against the revenue stream.

The Keno proposal prompted Rep. Stephen Dargan, D-West Haven, to write a letter to Attorney General Richard Blumenthal to ask him two questions.

“Is Keno considered a lottery game? Will legalizing Keno affect the state’s compact with the Mashantucket Pequot and Mohegan Tribes?”

State Parks Restored

On Friday, Rell reversed her decision to close a handful of inland state parks less than 24 hours after announcing the $1.3 billion in budget cuts.

Rell spokesman Chris Cooper said the governor reconsidered her position, because the parks are heavily utilized during the summer months and are an inexpensive way for families to recreate in a tough economy.

According to the state budget document, this means Rell is restoring $2 million over the next two years to fund the parks. Cooper said the money will come from a surplus in another Department of Environmental Protection account.