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Estimates show Connecticut's budget revenues worsening

Susan Haigh, Associated Press

HARTFORD, Conn. (AP) -- New revenue estimates released Monday show the state's budget problems continue to worsen, creating greater challenges for Gov. Dannel P. Malloy and state legislators as they try to negotiate a new two-year budget with a projected deficit that has ballooned to $5 billion.

The current fiscal year is now expected to end June 30 with an approximate $389.8 million shortfall, while the following two fiscal years are predicted to have deficits of $2.3 billion and $2.7 billion, respectively.

The deficit in the fiscal year beginning July 1 had been projected to be $1.7 billion, a large amount considering the state's main spending account, the general fund, is typically about $18 billion a year. Monday's updated estimates were released jointly by the budget offices that work for the General Assembly and the Democratic governor.

"The precipitous drop in revenue we experienced in late April creates major challenges for the state throughout the remainder of this fiscal year and into the next biennial budget we are currently working on," said Malloy's budget director, Ben Barnes.

He said immediate action is needed to reduce spending between now and June 30 and "to prevent the need to borrow to meet expenses."

The new, larger deficit is expected to wipe out the state's $235.6 million emergency budget reserve.

Barnes said "additional approaches" to reduce spending even further also need to be developed to help balance the state budget in the years ahead.

Senate Democrats, citing the state's dire budget circumstances, suggested all upcoming state budget negotiations be held in the presence of news media and shown on the Connecticut Network, which broadcasts legislative deliberations online and on television.

"Given the situation we face this year, I think it's time for a new paradigm," said Senate President Martin Looney, D-New Haven. "We think it's time to try something new to get to a better consensus result."

Looney denied the proposal to open up the talks to public scrutiny has anything to do with the close partisan make-up of the General Assembly, where there's now an even number of Democrats and Republicans in the Senate. Democrats have a seven-vote advantage in the House of Representatives.

Senate Republican Leader Len Fasano, of North Haven, called the proposal a distraction. He noted how Democrats "were perfectly fine with the process" of negotiating a final budget deal behind closed doors when they held a complete legislative majority.

Meanwhile, Malloy is scheduled to meet privately on Tuesday with Republican and Democratic legislative leaders in his Capitol office. He said he will eventually issue a revised state budget proposal of his own that accounts for the new revenue estimates.

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This story has been corrected to show the projected deficit in the current fiscal year is $389.8 million, not $394 million.