Connecticut lawmakers vote to close $1 billion budget hole

NEW YORK (Reuters) - Connecticut's lawmakers moved to close a projected budget deficit of nearly $1 billion on Friday, the last hurdle for a spending plan that now passes to the governor for signing before the start of the fiscal year on July 1.

House lawmakers passed the $19.7 billion austerity budget for the 2016-2017 fiscal year late on Friday evening after the contentious bill passed the state Senate a day earlier. Democrats control both chambers of the legislature.

"It's never easy to make cuts that reduce services and impact families," said House speaker Brendan Sharkey. "We were able to pass a budget that closed the deficit without raising taxes, borrowing or tapping into the rainy day fund."

Governor Dannel Malloy, also a Democrat, is expected to sign the bill into law in coming weeks.

Debate over the bill's contents last week meant lawmakers were not able to pass it by the end of the legislative session on May 4 and had to return in special session this week.

The budget makes about $820 million in recurring cuts and diverts $100 million from transportation and municipal revenue sharing funds. The spending plan closes a projected $960 million deficit next year.

Connecticut's finances have been hit by falling income tax revenues that officials have blamed on weak financial markets. The state's economy has been slow to recover after the recession and financial crisis in 2007-2009.

(Reporting by Edward Krudy; Editing by Tom Brown)