Gov. Dannel P. Malloy said Wednesday that he doesn’t plan on tinkering with tax increases to make up for the projected budget shortfall unveiled yesterday by the consensus revenue estimates.

Instead, Malloy will address the less than a half of percent drop in revenue by cutting spending. Republican lawmakers who were opposed to Malloy’s two-year budget with a built-in $1 billion cushion and the largest tax increase in the state’s history said it’s about time.

“We intend to end the year in balance,” Malloy said emphatically at an event in South Windsor.

He said there’s a reason he built a cushion into the budget because “you don’t know what your revenues are going to be.”

The same lawmakers complaining about the budget now, were criticizing it when it was proposed because it raised more revenue than the administration initially thought was necessary.

But despite his best efforts consensus revenue estimates released late Tuesday showed the budget on the precipice of a nearly $95 million deficit.

Republican leadership in the legislature was quick to issue a press release Tuesday questioning how Malloy planned to handle the situation in the wake of a $1.6 billion deal with the state employee unions that includes a no layoff provision.

“The deal the governor stuck with the unions really ties our hands and we still have not seen any savings on the spending side,“ House Minority Leader Lawrence Cafero, R-Norwalk,  said Wednesday. “The only option left is to significantly cut services to balance the budget.”

Malloy said cutting spending is exactly what he plans on doing. However, details of those spending cuts won’t be available though until next week.

“They want to have their cake and eat it too,” Malloy, who has promised to improve education and hold municipalities harmless in the second year of the budget, said Wednesday.

He said the state watches the revenue numbers “literally everyday” and what happened in Connecticut and other states with high income earners was a “precipitous fall off in the last few days of December.”

He said he reached out to surrounding states like Massachusetts, New York, and New Jersey and tried to find out if they were experiencing the same thing and “low and behold they were.” The biggest taxpayers were paying less in the fourth quarter than they had in the previous year.

The jump in revenues in the last quarter of 2010 can be attributed to potential expiration of the Bush tax cuts, which forced high income earners to realize their revenue in that year as opposed to the next, Malloy said.

“Having said that, that’s not an issue. We’re going to balance the budget,” Malloy said. “We’re going to make spending cuts that’s what we’ll do.”

Like last year Malloy continues to do things differently than his counterparts in New York and New Jersey.

On Tuesday, New Jersey Gov. Chris Christie proposed a 10 percent reduction in income taxes during his state of the state address.

“Gov. Christie has not funded his pensions prior to this year’s budget to the extent of $2 billion,” Malloy countered. “You’re looking at the first governor in the state of Connecticut to fully fund pension obligations on an actuarial basis.”

Meanwhile Republican lawmakers speculated that while Malloy won’t seek to hike any taxes in a budget adjustment year he will look for ways to increase revenues even if they don’t come in the form of a tax hike. 

Last week Malloy’s Budget Director Ben Barnes didn’t rule out changing regulations or policies in order to bring in new revenue to the state. The proposal Malloy announced last week to allow Sunday liquor sales is expected to bring in an additional $6.4 to $11.2 million in revenue.

Malloy is expected to roll out more policy changes in the weeks leading up to the Feb. 8 start of the legislative session.