Christine Stuart / ctnewsjunkie
Gov. Dannel P. Malloy (Christine Stuart / ctnewsjunkie)

HARTFORD, CT — Democratic Gov. Dannel P. Malloy said he’s working on another budget proposal, while he waits on legislative leaders to come up with one of their own.

Legislative leaders were meeting again Wednesday behind closed-doors. They said they will invite Malloy into the room once they are able to reach agreement.

Meanwhile, Malloy said the budget he’s working on would increase taxes less and cut spending more.

“I will be ready to put a new budget on the table in short order,” Malloy said.

While Democrats and Republican legislative leaders remain optimistic a deal can be reached, their body language may tell another story.

The governor said he watched legislative leaders address the media Tuesday and “although there were words of agreement, there wasn’t a whole lot of body language of agreement.”

He said that’s because people are locked in a room and they’re having disagreements and it’s hard to reach an agreement—“I understand that.”

However, he seemed to doubt Republican legislative leaders would be able to budge too much on their position regarding revenues.

“Do Republicans want to vote for even larger increases than they’ve already voted for?” Malloy asked.

If they are able to reach an agreement without the governor, Malloy said the threat of a veto override won’t force him to change his values. Those values were highlighted in Malloy’s veto of the Republican budget proposal that passed with the help of eight Democratic legislators. In his message, Malloy outlined his objections to some of the major changes in the Republican budget involving future labor agreements, and education spending.

“Don’t expect I will have changed my values just to get a budget done,” Malloy said.

The clock is still ticking on a variety of issues and the longer these negotiations take the greater the risk that the state will lose revenue and an opportunity to cut spending.

One of the outstanding issues is the hospital tax.

There’s no hard and fast deadline associated with changes legislators and the governor want to make to the hospital tax. However, in order to qualify for the additional funding the state will have to submit a state plan amendment to the Centers for Medicare and Medicaid Services. There’s technically no deadline for doing that, but there’s also no precedent.

He said they’ve put legislators on notice that every day that passes endangers the new hospital taxing scheme as a part of the solution.

“There is no drop dead date,” Malloy said. “Because they don’t have a drop dead date.”

Malloy said if they’re able to reach a budget agreement, which includes the hospital tax, then there’s less pressure on them to settle the lawsuit the Connecticut Hospital Association and 20 hospitals filed against the state in 2016.

“I think the hospitals have played chicken with this issue in not reaching a universal agreement,” Malloy said. “If there’s going to be an agreement, I hope the hospitals haven’t overplayed their hand.”

The two sides are expected to meet in court on Oct. 19 for a pre-trial conference.

Legislative leaders are hoping to reach an agreement and vote on a new budget proposal next week.