Hartford — Connecticut lawmakers said Tuesday they have abandoned a proposal to offer certain state employees a financial incentive to retire as a way to help balance this year's budget.

New estimates showed the plan would not save as much money as some legislators had hoped. Also, there were concerns the program could worsen the state's pension liability problems.

Despite scrapping that idea, Democratic and Republican leaders emerged from a closed-door meeting with Democratic Gov. Dannel P. Malloy expressing optimism they still will find the $350 million in savings needed to close the shortfall in the current $20 billion state budget and also make tax changes and restore state funding to hospitals.

"I think the numbers are getting closer," said Senate Minority Leader Len Fasano, R-North Haven.

Both Democrats and Republicans confirmed that higher taxes are not being considered.

The lawmakers met privately with Malloy for several hours. While more talks are planned for Wednesday, it remains unclear when exactly rank-and-file lawmakers will return to the state Capitol for a special session on the budget.

They had hoped to meet sometime during the second week of December but need to provide lawmakers 10 days advanced notice of a special session.

That time period, however, is shorter if the governor calls them into session.