Christine Stuart photo

Legislative leaders from both parties emerged Monday from a closed door meeting with Democratic Gov. Dannel P. Malloy and were encouraged about the progress they were making on closing Connecticut’s state budget shortfall.

But neither party was willing to give many details about the negotiations because they will meet again Tuesday to continue the discussion.

“We’re talking,” Malloy said after the meeting in his state Capitol office. “We’ve decided to block out a bunch of time tomorrow to see if we can make headway or not.”

One of the biggest differences between the deficit mitigation plan Republicans and Senate Democrats put forward and the plan proposed by the House Democratic caucus and Malloy is a Retirement Incentive Program for state employees.

Asked if they had reached agreement on the issue, Senate Minority Leader Len Fasano, R-North Haven, said, “We’ll be talking more tomorrow.”

Malloy and House Democrats don’t support offering employees eligible for retirement three years of credit on their pension because of the impact it would have on the state’s unfunded pension liability. Each have put forward their own proposal to close a $350 million budget shortfall without offering a RIP.

A report from the Center for Retirement Research at Boston College found the early retirement deals offered by former Govs. John G. Rowland and M. Jodi Rell added nearly $2 billion to the state’s current unfunded pension liability.

As far as the discussion on Monday, Sharkey said, “We had a broad discussion about where everybody stands.”

He said there is some agreement on things and some disagreements, but the conversation is continuing.

House Minority Leader Themis Klarides, R-Derby, said if they “weren’t optimistic about where they were going, we wouldn’t be coming back tomorrow.”

Sharkey said he wanted the resist the “temptation” to give reporters something to report by offering more details about the discussions to close a $350 to $370 million budget shortfall.

“There’s enough common ground to be coming back tomorrow,” Klarides said.

Leaders haven’t set any deadline to conclude the discussions, but there’s no disputing that the longer it drags on, the fewer savings they will be able to find.

Malloy said he thinks they are running out of time and legislative leaders know it’s “not over, but we have a limited amount of time.”

Malloy said there is “some common ground” between the parties, and “I think there is a realization of what the issues are. People’s ability to move on the issues is what we’ll test tomorrow.”

The last time Republicans were invited to participate in a deficit mitigation negotiation was back in 2012. Asked to compare those talks to the current ones, Malloy said he would have to think about it.