With the state’s looming budget deficit promising to cost New Haven millions of dollars in aid, a lack of available funds has already begun to affect the city’s bus service.

The state Department of Transportation has been forced to make some cuts in the CT Transit budget, and a plan put forward by New Haven officials and state legislators for a new central bus exchange appears to be dead in the water.

The current hub of public transportation in New Haven is the Green, around which buses drop off and pick up passengers at several different stops. But Mayor John DeStefano Jr. and others in his administration had been pushing for a new enclosed station nearby.

“Right now, we’re not working on it because we had initially expected to receive funding from the state that we are not going to get,” said Henry Fernandez, the city’s economic development administrator. “The bus exchange probably won’t happen as of now.”

Michael Sanders, a transit administrator with the DOT, said that although there has not been a reduction in the CT Transit budget, expenses have grown faster than the money allocated by the legislature.

“We still have a fiscal deficit for this year,” Sanders said. “For next year we have the extension of the problem. We’re supposed to get a 7 percent [budget] increase, but with the way they are talking we will probably get less than that.”

Sanders said that adjustments were made to smooth the cuts in service that have been made.

“We have made some cuts,” Sanders said. “There’s been some overcrowding on the J line, so we added extra buses at peak times on the J line. But other than that it’s been pretty uneventful.”

Local officials, including state Sen. Martin Looney and Mayor John DeStefano Jr., have been outspoken in opposing cuts in the city’s bus service.

“I would hope not, because one of the primary policy issues is an increase in mass transit,” Looney said. “Cuts in mass transit should be one of the last cuts rather than the first.”

DeStefano said cutting public transportation makes for bad public policy. He added that he would like the bus exchange to provide protection for people waiting for the bus.

“Usually in the morning, I have reason to take a walk,” DeStefano said. “When I went by several bus stops this morning, there were people freezing outside. It seems to me that if we gave people comfortable places to transfer or wait for buses, they might ride them.”

DeStefano also said that sheltered bus exchanges are almost universal outside Connecticut.

“We happen to think that facilities that provide shelter — which is what most cities in the 49 other states have — make good investments,” DeStefano said. “It’s time for Connecticut to take that giant leap forward.”

But Sanders said he thinks New Haven does not need a new central bus exchange.

“We already have that — it’s called the Green,” Sanders said.

Officials have batted around a suggestion to put a bus exchange on the former Shartenberg lot at State and Chapel streets. But Sanders said a new structure there would not solve the problem of waiting outside.

“If we moved the whole operation over to the Shartenberg structure we would still have buses that extend into the street, so we don’t want to move the whole operation down there because it would cost us more money,” Sanders said. “We were never big proponents of a central bus exchange.”

Looney emphasized the importance of public transportation to New Haven.

“I think that we need to renew our commitment to mass transit, especially as we face increasing gridlock on the highways, particularly on [Interstate 95],” Looney said. “Downtown New Haven needs to be a hub of bus transportation.”