In the basement of the state Armory surrounded by holiday decorations promoting the National Guard’s annual fundraising drive, Republican Gov. M. Jodi Rell said she will be handing over her transition budget next week to Governor-elect Dan Malloy.

The budget will likely be the lump of coal Malloy was expecting and will have a built-in $3.3 billion deficit for next fiscal year.

Unlike previous budget proposals Rell said the transition budget will include recommendations she previously made in past budgets, but in much broader terms.

“We’re giving them in broad terms some of the things they can look at and some dollars associated with it,” Rell said. “I don’t want to get into too much detail. I think that they should have it first.”

“It will be the policy of the incoming governor and administration to determine where they want to spend money and where they can cut money,” she said.

She said the budget will include recommendations for state agency consolidations and a commission report on the state’s unfunded pension liability. The unfunded pension liability report was released just a few days before the Nov. 2 election and failed to prioritize any of the recommendations leaving the new administration simply with a menu of options.

“We will leave this administration with no budget deficit,” Rell said referring to the modest $300,000 surplus the state will have at the end of the fiscal year. “I have been very careful on that.”

“What I’m leaving is a budget that will have no deficit for the fiscal year ending June 30. I was prepared if necessary to do a deficit mitigation plan again and rescissions if it came to that, but we’ve been holding our agencies feet to the fire and keep our commitment to keeping that budget in tack,” Rell added.

But Malloy won’t have the one-time federal revenues and close to $1 billion in borrowing Rell and the Democratically-controlled legislature used to balance the current budget.

On the campaign trail Malloy said the first thing he will do as governor is sign an executive order requiring all state agencies to report under Generally Accepted Accounting Principles or GAAP.

Asked what she thought of that idea, Rell said, “The problem with GAAP principles, I’ll save the whole discussion on it, is that it costs several hundred million dollars for us to actually go into GAAP accounting and that’s why its been postponed each year by the legislature.” 

“It’s not complicated but it takes me forever to explain it,” Rell said as she stammered to find the rights words about why it will cost Connecticut money to transition from its current accounting system to GAAP.

She said it will add to the cost of current services and when she spoke to her budget office about going to GAAP they said “we’ll there you go, you’ve just built another billion hole in the budget.”

“That’s why the legislature hasn’t adopted it,” Rell said. “You can’t have something that’s going to be GAAP in name only.”  She said you have to phase it in and “I don’t know how you do that.”

Rell remained coy Wednesday when asked about what she thinks her legacy to the state may be after she leaves office at the end of the year. Will it be campaign finance reform? Preservation of open space? Increased enrollment in early childhood education?

“I don’t look at any one thing as a legacy,” Rell said Wednesday following a press conference in the basement of the state Armory.

However, not wanting to ignore the question Rell said she would answer it by talking about her worst day in office and her best day in office.

“The worst was the day the BRAC commission told us that they were going to close the sub-base. The best was the day the BRAC commission said we’re not closing the sub-base. But it took us a long time to make that happen,” Rell said.

Rell, who took over as governor in 2004 when then Gov. John G. Rowland resigned, was elected to a full term in 2006 when she beat New Haven Mayor John DeStefano by a large margin.

Earlier this week the University of Hartford announced that it will establish a Governor M. Jodi Rell Center for Public Service in recognition of outgoing governor and her 25 years of public service as an elected official.

“I don’t have a role yet, but I would love very much to come back and be a guest lecturer at some time or another,” Rell said of the Center. A fundraiser for the new center will be held Dec. 7.

As for her retirement Rell said she will be spending time traveling, reading a box of books, and visiting her four grandchildren.