Gov. Dannel Malloy said Friday that he would accept new taxes if it meant finally passing a state budget.

"The time for compromise is now, and the proposal I've put forward today represents just that," he said.

Malloy is indicating that he would reverse course and accept a small hike in sales and restaurant taxes, as well as possibly tolling Interstate 95, in an effort to reach a spending compromise.

He said that if lawmakers don't act this month, devastating consequences will follow.

Gov. Malloy has been operating the state under a bare-bones emergency order since July 1. If lawmakers don't pass a budget by the end of this month, those cuts get even deeper -- especially when it comes to money for schools.

The governor is also willing to slow down his shift to a "Robin Hood" school funding plan -- which sends money away from richer school systems to poorer ones like Bridgeport and Norwalk.

Under this new plan, almost every town in western Connecticut would lose all state school funding. Milford would lose half of its money over the next two years.  Only Stamford, Norwalk, Bridgeport, Stratford, and Torrington would get more funding.