HARTFORD - On day one of operating without a budget in place, Governor Jodi Rell along with Legislative leaders, were unable to reach a budget agreement after meeting at the Governor's residence today for five hours.

This was the third straight day of budget talks at The Residence. The sticking point is over taxes. Both sides have agreed not to talk to the press as they try to hammer out a deal.

Former Senate President, George Jepsen, said he doesn't remember a time when Democrats and Republicans were so far apart. He said The Government is running and can continue to operate on emergency budgets.

"It's not like Government shuts down," Jepsen said. "It's something you can do for a while. It's hard to do it forever because at some point, you start to run out of money."

Eventually, State Parks and Motor Vehicle Departments could be closed if it ever gets to that point, not to mention state layoffs. There are no plans for Rell and lawmakers to meet tomorrow and it is unclear if talks will resume during this Fourth of July holiday weekend.

Meanwhile, Governor Jodi Rell vetoed the only Democratic Budget plan on the table--Senate Bill 1801. Rell criticized the two year budget plan for $2.5 billion in new taxes on people and businesses. She also said the budget was built upon "phony cuts and phantom accounting." Democratic leaders did not respond to Rell's veto or statements.