HARTFORD, Conn. -- Facing a looming deadline on setting the state's budget, Gov. Jodi Rell offered a second budget Thursday to the General Assembly.

"The economy has worsened since I presented my first budget in February and I had hoped the Legislature would have acted by now with a real sense of urgency," the Governor said. "With a week left in the session, and absent any meaningful action by the legislative majority, I am providing the leadership needed to get a budget agreement before the session ends. That is what the families and taxpayers of this state expect."

The new budget, like her first budget, holds the line on taxes, eliminates several state agencies and consolidates others and provides mandate relief for municipalities, including suspending binding arbitration for the next two years and preserving municipal aid.

"This new budget contains deeper cuts and no tax increases," Rell said. "It also preserves municipal aid so that tax increases are not passed on to local taxpayers.

"Connecticut residents and businesses cannot afford massive tax increases," she said. "It is a budget that the families of Connecticut can afford and one that their government can ill-afford to delay any longer. They are counting on us to make those cuts and to finish our business on time."

But it also brings deeper cuts. Four more courthouses could close on top of the two originally proposed if her new budget is approved.

"I know these cuts aren't popular, and I don't relish announcing them, but they are necessary," she said.

Rell called the current fiscal situation an opportunity to reshape government and position the state to thrive when the economy rebounds.

"Our neighboring states continue to raise taxes, providing us with a chance to be a beacon of opportunity to businesses and employers," she said. "When businesses look for a prime location to put down roots, we want Connecticut to be the most attractive draw in the region."

Unhappy with the governor's initial budget, Demorats created their own, which called for cuts and tax increases. That budget didn't sit well with Rell.

"She said for months she doesn't like our proposal, but she wasn't willing to say what hers was," said Rep. Cameron Staples, D-New Haven. "We had to wait for her proposal because you can't negotiate when you're the only one with the plan."

Democrats said her February proposal was more than $2 billion short of what was needed to close the budge gap.

But with six days before the session's end, they said they're hopeful this new plan is different.

"If it adds up, it may be the beginning of the process to get to a resolution," Staples said.

Under the governor's new proposal:

Fiscal year 2010 spending is 1.4 percent below fiscal year 2009 levels

Fiscal year 2011 spending increases 2 percent

10 state offices and 70 boards and commissions are eliminated

10 boards and commissions are consolidated with other agencies

An additional $650 million is cut over her prior budget in each of the next two fiscal years

Borrowing noted to be paid off in seven years

$350 million will be securitized in last quarter of 2011

The state will introduction of "Keno" and securitization of those new revenues

Rell presented her initial, $38.4 billion budget to lawmakers on Feb. 4. That budget also included a plan to shrink the size of government by consolidating agencies, selling surplus property and reducing the state fleet.

"Unfortunately for the citizens of this state, the legislative majority has so far ignored my recommendations," she said. "Meanwhile, our economy has steadily worsened. Even more Connecticut families have had their lives and livelihoods uprooted by job losses or foreclosures."

Rell said 18,100 jobs and more than 4,000 businesses have been lost since she submitted her first budget proposal. She said 7,500 families have also lost their homes to foreclosure in that time.

"The top income tax in New York and New Jersey is nearly 9 percent and Rhode Island's is just under 10 percent, while Connecticut's top rate is still 5 percent," she said. "If we hold the line on taxes and make the tough decisions now, we will make our state infinitely more affordable for business and infinitely more appealing for investment."

Rell said holding the line will also help create jobs and keep young people in the state.

"We can reverse the 'brain drain' and keep our young college graduates in Connecticut, in jobs they find here," she said. "Our housing market will rebound as these graduates and people attracted to our state seek new places to live. This is not economic theory -- it's economic fact."

With the fiscal year ending June 30, Rell said she has used her executive authority to make five rounds of rescissions and offered lawmakers four deficit mitigation plans totaling about $1.8 billion. She said she has also worked with state employee unions to secure concessions of $700 million through FY 2011.

"Tax increases are the easy answer, but the truth is, it is much harder to say 'No,'" Rell said. "It is harder to say, 'Not this year.' It is harder to say, 'It is time for government to change.'"

The governor said making the choices in the budget weren't easy, but that they had to be made with courage and vision.

"Lawmakers need to act now with that same courage and vision, and urgency," she said. "I'm not looking for a battle, but I am willing to fight one because the future of Connecticut and its people are worth fighting for."