Democrats strike tentative deal to close $371 million state budget deficit

Leaders of the state legislature’s Democratic majority reached a tentative deal late this afternoon to close the $371 million deficit projected for this fiscal year, Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said, adding the agreement also reflects a new plan submitted by Gov. M. Jodi Rell.

House Democratic Caucus spokesman Douglas Whiting also confirmed the deal, which could lead to votes in the House on Tuesday and the Senate on Wednesday. Williams and House Speaker Christopher G. Donovan, D-Meriden, will seek to meet with the governor Monday to determine whether she will support the measure.

Office of Policy and Management Secretary Robert L. Genuario, Rell’s budget director, said today that the governor had been meeting personally with legislative leaders this week in hopes of reaching an agreement. “We’ve been working with them in a collaborative fashion and hopefully it will bear fruit,” he said.

The tentative deal largely relies on spending cuts outlined in a proposal offered Monday by Rell as well as in a bill adopted two weeks ago in the Senate.

Williams confirmed that the plan does not include either his caucus’ or Rell’s proposal for a tax on hospital gross revenues, but declined to discuss segments of the plan. “That doesn’t mean we’re giving up on that,” he said of the hospital tax, which has been proposed as a mechanism to draw between $65 million and $103 million in additional federal health care grants to Connecticut.

The Senate leader said he expects the hospital tax would be discussed again as lawmakers and the governor negotiated revisions to the preliminary, $18.93 billion budget adopted last September for the 2010-11 fiscal year.

The Senate Democratic deficit-mitigation plan offered earlier this month would have raised an extra $70 million annually by boosting estate tax rates. Williams only would say that “the estate tax remains a bone of contention.”