(Updated 3:22 p.m.) The legislature’s Democrat-controlled Appropriations Committee budget will increase spending by close to $350 million in 2011, despite projections of a looming $4 billion deficit in 2012. It increased spending by $373 million over Gov. M. Jodi Rell’s budget proposed in February.

Democratic lawmakers said much of the spending increase will be off-set by increases in federal reimbursements for things such as Medicaid and other social programs.

The total increase in federal reimbursement based on the changes made to the spending side of the budget is expected to bring in more than $440 million in federal funds. Democratic lawmakers said that means their budget proposal spends $66.8 million less than Republican Gov. M. Jodi Rell‘s $18.9 billion budget.

Prior to a vote on the proposal Sen. Dan Debicella, R-Shelton, said the proposal shows “common sense has just left the state legislature.” He said plain and simple the Democratic budget proposal adds spending.

“This budget doesn’t lack common sense,“ Sen. Toni Harp, co-chairwoman of the Appropriations Committee, countered. She said the additional spending ultimately brings in more than $400 million in federal revenues. She said Rell’s budget reduces federal revenue.

“This budget is in fact common sense,” Harp said. “It is complex and maybe difficult for some people to understand.”

Harp called the proposal “fair” and “compassionate.”

Republican lawmakers, House Minority Leader Lawrence Cafero and Senate Minority Leader John McKinney, said a cursory glance at the proposal shows the Democrats increasing spending and completely ignoring the deficit in 2010.

There’s also a few gimmicks, according to Cafero and McKinney. They said the Democratic spending proposal shifts operating costs for the school based health centers and AIDS services to the Insurance Department budget, which is funded with payments from the insurance industry.

McKinney said they also shifted about $11 million in social programs, like alternatives to incarceration, to the Judicial Branch. And it shifts the foreclosure mediation program from the Judicial Branch to the Banking Department to help maintain funding for 25 mediation specialists, 17 clerks, and 8 caseflow coordinators. Also programs traditionally funded by the Department of Corrections will now be funded by the Judicial Branch for a total of $23 million.

“Yesterday the Democrats attacked the governor for appointing 10 judges, yet today they’re adding $23 million onto their plate,” McKinney said.

And for all the talk about consolidations, Cafero said not one state agency was consolidated in the draft budget.

In an unusual move, which seems to signal the Finance, Revenue, and Bonding Committee may not agree to balance the spending side of the budget proposal with a tax proposal, the Appropriations Committee included a new tax on hospitals.

According to the draft document re-establishing the hospital tax will generate $206.8 million in revenue and allow the state to draw down $103.5 million in additional federal funds. A portion of the revenue would then be distributed back to 31 hospitals. John Dempsey, the state-owned hospital, is exempted from the tax.

When asked if this draft spending proposal was a “gift” to Republican lawmakers, Cafero said “it’s beyond the gift stage.”

“Republicans are truly scared we’re going to go bankrupt,” he said. “Now we’re on a suicide mission.”

Rell also offered her thoughts on the proposal Thursday afternoon in an emailed statement.

“This budget has no real spending cuts, no agency consolidations or mergers and no reductions in the size and scope of state government,” Rell said. “Virtually all of the budget cuts I proposed are restored – along with millions in new spending. All this while homeowners and employers in our state struggle with an economy that is barely limping along, continued job losses and a housing market that is still flooded with foreclosures.”

“In these economic times, this is a breathtakingly inept proposal.”