The legislature’s Democratic majority raced toward the last day of session by finishing a draft budget compromise that closes an estimated $2 billion budget deficit.

The budget agreement between Republican Gov. M. Jodi Rell and Democratic lawmakers does not include any additional taxes, but continues a surcharge on electric ratepayers that was set to expire as early as December 2010 for the state’s largest utility company.

Most of the proposal relies on borrowing $955.9 million, which will be paid back through an energy efficiency program paid for by all electric ratepayers and another surcharge on consumers‘ electric bills that was set to expire. The rest of the $726 million deficit was made up through improving revenue projections, spending cuts, $365 million in federal stimulus funds, and the deferral of a $100 million payment to the state employees pension plan.

“It’s an amazing accomplishment based on where we were a year ago,” Rep. John Geragosian, co-chairman of the Appropriations Committee, said Tuesday.

While some minor details are still being fleshed out, Rep. Cameron Staples, co-chairman of the Finance Committee, said they hoped to have a vote on the proposal tonight. But the necessity of printing the bill caused that date to be pushed back to Wednesday.

Before debate begins, the Finance Committee will have to hold a hearing to adjust the revenue projections in the 2011 budget compromise. A Finance Committee meeting will be held Wednesday morning.

The budget compromise allows the state to push borrowing $955.9 million in Economic Recovery Notes, which don’t fall under the state’s bonding cap, out into 2011 rather than having to create a hole in 2010. Rell had proposed creating a deficit in 2010 to borrow the notes, but Democratic lawmakers said since 2010 is already balanced the date was pushed back until 2011. Meanwhile they said they’ll keep their fingers crossed and hope revenues improve over time to reduce the amount and eight year time frame for the borrowing.

Plans to use $28.7 million a year from the Energy Efficiency fund, which helps fund energy audits that residents and commercial businesses use to lower their energy costs, received some criticism from environmentalists.

Environmentalists say lawmakers are being hypocritical passing green jobs bills then raiding the fund that pays for them.

Jesse Stratton of Environment Northeast estimates that taking a portion of the fund to pay off the debt will cost the state 1,120 jobs a year.

The plan released Tuesday as a compromise between the Democrats and Rell also uses $107.7 million in annual surcharges set to expire for Connecticut Light and Power customers in 2010, United Illuminating customers in 2013 and municipal electric companies in 2017.

“We are disappointed that our customers’ electric bills are still being used as the state tax vehicle to address the budget gap; and by the short-sighted decision to cut green jobs by taking a portion of the Energy Conservation and Load Management Fund to address the same budget shortfall,” Tanya Meck, spokeswoman for Connecticut Light and Power, said Tuesday.

The 33 percent annual surcharge for each of the three utilities will help the state pay back a portion of what it intends to borrow over the next eight years. Staples said the reliance on each based on the expiration date of the surcharge will be staggered.

Staples said he understands some people aren’t happy with the decision to take money from the Energy Efficiency fund, however, the budget compromise tries to off-set it by creating an $18 million revolving loan fund for residents and businesses seeking to increase their energy efficiency. The loan fund will help leverage $75 million in private investment, Staples said.

In addition to the fancy fiscal gimmicks the 2011 budget cuts about $171.6 million in spending and sweeps $9 million from the Banking Fund, $8 million from Connecticut State University reserves, $5 million from the Citizens’ Election Fund, and $5 million from the Community Investment Act. Click here to download a copy of the spending cuts and here to download a worksheet explaining how the state plans on paying for the borrowing.

Republican lawmakers will introduce their budget proposal as an amendment. Click here to read about how they would solve the budget deficit.