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House passes bipartisan budget deal, sends bill to governor

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HARTFORD -

The state House of Representatives voted 126-23 to approve a bipartisan budget deal Thursday, sending it to Gov. Dannel Malloy with a veto-proof majority.

"There were bumps in the road," said state Rep. Joe Aresimowicz, the Democratic speaker of the house. "We all still believed in each other and the process."

The budget, which comes after a 118-day standoff, does not include sales or income tax hikes or highway tolls. 

Most schools, including UConn, will lose money, and teachers will pay more into their pensions. 

But according to a spokesperson for the governor's office, a problem with wording regarding the hospital tax could cost the state up to $1 billion in federal money.

At issue is the language in Section 602, which the governor's office says may not comply with federal law. It removes the specified tax rate of 6 percent on inpatient services and instead specifies total tax revenue raised of $306 million. That wording would result in a tax rate on inpatient services above 6 percent, resulting in a Medicaid penalty of $550 million to $620 million a year.

A separate clause could result in an additional penalty of the same amount.

"Staff will continue to analyze the bill, weighing its merits and faults, so that the governor can arrive at an informed and carefully considered decision regarding his support," said Kelly Donnelly, the governor's communications director.

Legislative leaders say they can change the hospital language at a later date.

Gov. Malloy has until Wednesday to either sign the budget, veto it or let it become law without his signature.   He can also veto specific line items in the budget if he wishes.

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