Christine Stuart photo
Gov. Dannel P. Malloy talks to Carla Squatrito, president and founder of Carla’s Pasta (Christine Stuart photo)

Gov. Dannel P. Malloy met with Democratic legislative leaders Monday to set forth a framework for negotiating the two-year, $40 billion budget.

Senate Republican leader Len Fasano and House Republican leader Themis Klarides sent a letter to Malloy on Wednesday asking for a seat at the table.

“We would like to work together to ensure that the Democrats’ budget in its current form does not move forward,” the letter reads. “If such a package were to be passed by the Democrat majority, it seems clear to us that you will use your veto power to prevent these massive tax hikes and new taxes from burdening our families. You can count on our help to support your veto.”

Malloy made Democratic lawmakers aware he’s not enamored with their $2.4 billion tax package, but he hasn’t uttered the dreaded “V” word.

“I’ve not threatened a veto and I’ve not drawn a line, but I think people know where I am,” Malloy said Wednesday during a tour of the Connecticut Business and Industry Association’s Manufacturing Day at the state Capitol.

On the campaign trail Malloy pledged not to increase taxes to close an estimated two-year, $2.7 billion budget deficit.

Earlier this week, Malloy expressed doubts that the Democratic majority has enough support to pass the revenue package, which increases the income tax on the wealthy and broadens the sales tax base on a number of services.

Senate President Martin Looney defended the proposal Wednesday to lower the overall sales tax from 6.35 percent to 5.85 percent (in the first year) while expanding it to additional services.

He said it’s a recognition of the fact that the economy has shifted from goods production to services.

“Our sales tax base has been made volatile by the changing economy,” Looney said, adding that expansion of the sales tax base will make it less volatile.

“It recognizes we have a 1950s sales tax structure in 2015,” he added. “If we are going to be able to continue to fund municipal aid and reliably so, we need a reliable revenue base.”

House Speaker Brendan Sharkey told a group of local municipal officials Wednesday that the goal of the tax package was to “make our tax system less volatile, reflecting modern realities and also imposing some of that discipline that we need.”

Sharkey said the first day of budget negotiations went well, even though he was unable to divulge many details. He said they spent some of the meeting going over some of the unknowns that have cropped up since both the governor and lawmakers crafted their budget proposals, such as a potential settlement with the union employees laid off by former Gov. John G. Rowland in 2003.

Attorney General George Jepsen’s office has estimated it will cost a little more than $44 million to settle the decade-old lawsuit against the state.

“We need to get our hands around those numbers and make sure we’re being concise about that,” Sharkey said.

Looney said the chairs of the two budget writing committees and the Office of Policy and Management will be having daily meetings on the budget until a deal is reached.

After the first meeting, both sides remain optimistic they will finalize a budget before 2015 session adjourns on June 3.

“I’m hopeful we can conclude it by June 3,” Malloy said. “What’s important is that we get the right package as opposed to when it’s gotten. If we need to go into special session I’m certainly prepared to do that.”

Looney said he’s still confident with daily budget negotiations that they will get there by June 3.

The longest budget negotiations have ever gone was Sept. 1, 2009, when former Republican Gov. M. Jodi Rell let the two-year, $37.6 billion budget go into effect without her signature. Rell was dealing with a Democratic supermajority at the time, which likely had to the votes to override a veto. She said she allowed the budget to go into effect because she felt the stalemate was beginning to have an impact on the residents.