Rell and Donovan: Deal reached on deficit plan

A deal has been struck between House and Senate Democratic leaders and Republican Governor M. Jodi Rell to help close the $371 million deficit projected for this fiscal year, House Speaker Christopher G. Donovan and Rell said today.

“We agreed that pretty much, I mean 99.9 percent, we had a basis for an agreement. It’s just working out a few details,” Donovan said. The House will convene tomorrow to take up an amended version of Rell’s deficit-reduction plan released last week.

“There is a framework, and I gave them a plan,” Rell said later in a brief interview. “We have a difference of opinion on a couple of things. Nothing major.”

Donovan said the agreement does not include cuts to town aid nor a tax on hospital’s revenue, at least for the fiscal year running through June 30.

“I believe we will be ready tomorrow,” Donovan said.

The estate tax rate increase, which was included in the Senate Democratic deficit-mitigation plan passed last month to raise $70 million, will not likely be included in tomorrow’s plan, Donovan said but “discussions are ongoing.” Rell threatened to veto the Senate’s plan.

“There is still time, we could use that revenue,” he said.

The governor has opposed any change in the estate tax, which applies to inheritances worth more than $3.5 million.

Donovan said the estate and hospital taxes are still in the running to help close next year’s looming deficit.

“Let’s get 2010 over and then concentrate on 2011. We do have a revenue problem,” he said.