HARTFORD, Conn. (CBSNewYork) – Time is running out for Connecticut state lawmakers to reach a budget agreement.

As WCBS 880 Connecticut Bureau Chief Fran Schneidau reported, a budget that was expected to end the fiscal year with a $500 million surplus now has lawmakers projecting a very thin margin this year and a deficit for fiscal 2015.

Gov. Dannel P. Malloy‘s budget office is now projecting the current fiscal year’s General Fund will end $43.4 million in surplus, a drop of $461.5 million, according to a letter sent Wednesday from the Office of Policy and Management to the State Comptroller.

Malloy’s proposed $55-per-person tax rebate, to be paid for with surplus funds, was a casualty of the declining revenues. Malloy scrapped the idea, citing a drop in expected revenue from capital gains income. OPM said personal income tax collections are down $389.1 million from original projections.

State Senate Republican leader John McKinney said he’s not surprised by the revised projections.

“It’s a result of the high tax increase. Gov. Malloy overestimated revenues,” he told Schneidau.

McKinney is running for governor.

He said his offers to reach a bipartisan budget deal have been turned down.

“It’s a very arrogant attitude and unfortunately, we’ve seen that in Connecticut under one-party rule where the Democrats control everything in state government,” said McKinney.

Lawmakers have until the current legislative session ends next Wednesday to work out a solution.

Some lawmakers have voiced support for legalizing the game of keno to help boost revenues.

The Democratic governor’s handling of the budget and economy is expected to be a key issue in this year’s gubernatorial race. Malloy is seeking a second term.

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