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SUSAN HAIGH
Associated Press Writer

HARTFORD, Conn. (AP) � Connecticut lawmakers returned to the state Capitol in special session on Friday, but not to vote on a new two-year budget.
Instead, they finished other work, such as appropriating $11 million in federal stimulus money to fund a summer youth employment program that serves thousands of teens, and modifying procedures for teacher certification.
But throughout the day, the General Assembly's majority Democrats were being briefed on the details of a possible Democratic budget that leaders hope to call up for a vote sometime next week, days before the fiscal year ends June 30.
It's questionable whether Gov. M. Jodi Rell will sign it, however. Rell, a Republican, has been at odds with Democrats about whether taxes are needed to cover the budget deficit, projected to be up to $8.7 billion over the next two fiscal years.
There have been no bipartisan budget talks since the General Assembly adjourned its regular session June 3.
"You never want to predict," said Rep. Cameron Staples, D-New Haven, the co-chairman of the legislature's tax-writing committee, when asked if he believes Rell will sign it. "It's closer to what she likes than our last package."
The two-year plan, more than $37 billion, scales back some of the tax increases that were part of the Democrats' April tax and spending plan. While not revealing details, Staples said it includes a lesser increase in the personal income tax and a smaller surcharge on the corporation tax.
This new plan no longer eliminates sales tax exemptions for some products and services. The budget from April affected a laundry list of exemptions, ranging from machinery and equipment to incontinence pads.
The new proposal also retains funding for the property tax credit against the income tax, keeping the credit at $500.
Staples said the cigarette tax will increase under the new plan but did not provide details. He said other tobacco products would also be affected by a tax increase.
Just like the April budget, this new plan imposes a 30 percent surcharge to taxable gifts and estates worth more than $2 million, Staples said.
Democrats have said they've found hundreds of millions of dollars in additional cuts to help roll back some of the tax increases, but had not provided details of those spending reductions late Friday afternoon. Rell's office said it had not seen the information either.
Meanwhile, Republican legislators criticized the majority for a bill on Friday that covers arrears within various state agency budgets for the current fiscal year. They claim the move added $29 million to the current fiscal year's deficit, estimated to be about $1 billion. Much of that red ink will likely be covered by borrowing.
The bill approved by lawmakers provides $22.2 million to the financially struggling University of Connecticut Health Center in Farmington and $70 million for Medicaid, including the HUSKY health insurance program for needy children.
"We have responsibilities we have to uphold and we're doing so by doing this," Rep. John Geragosian, D-New Britain, co-chairman of the budget-writing committee, said of the legislation that passed Friday.

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