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Tax shortfall leads to state hiring freeze; GOP unveils budget plan

HARTFORD -- Early state revenue projections show a more dire budget situation than originally thought.

Thursday evening, the Governor's Office of Policy and Management (OPM), sent a memo to all executive branch commissioners ordering an immediate hiring freeze after a projected tax revenue shortfall of more than $500 million dollars.

"On Monday, May 1st we are required to produce a consensus revenue forecast based on April tax receipts," wrote Ben Barnes, OPM Secretary, in an urgent memo to all State Commissioners. "Unfortunately, our income tax revenues are currently more than $450 million below our target, largely due to poor performance over the last two weeks. This leaves us with a current year General Fund deficit that could exceed the resources in the Budget Reserve Fund ($235 million)."

Earlier this week, projections on the tax shortfall were thought to be between $200-300 million.

"The Special Transportation Fund is also projected to have an operating deficit of about $30 million," wrote Barnes. "In response to this, OPM is immediately implementing a hiring freeze, eliminating any approved but unfilled vacancies, and requiring that executive branch agencies immediately review all ongoing and planned activities to identify potential savings that can be realized immediately. Please review all purchases, travel and contracting to ensure that expenditure of state funds is absolutely critical."

Sources project the current state deficit may exceed $4 billion once all calculations are made. An official estimate is due early next week.

Connecticut lawmakers are making some small progress in reaching a possible agreement on a new state budget.

The General Assembly's Finance Revenue and Bonding Committee unanimously approved a revenue package Thursday with no tax increases.

Despite that, it's clear bad feelings between Democratic and Republican leaders remain.

The two sides exchanged barbs over whether an alternative, two-year $40.3 billion Republican budget proposal, raises taxes. While Senate and House Republican leaders contend their "Confident Connecticut" plan does not rely on tax increases, Senate Majority Leader Bob Duff is calling it "half-baked."

He said it ultimately increases local car and property taxes.

Senate Republican Leader Len Fasano disagreed, saying, "enough is enough, get to work."

Democrats halted action Tuesday on a spending bill, blaming the lack of GOP support.

Governor Dannel Malloy invited legislative leaders to a meeting next week to discuss the state's budgets.