A week after Gov. M. Jodi Rell proposed to cut $84 million from total aid to cities and town across Connecticut, her 2006 gubernatorial challenger, New Haven Mayor John DeStefano Jr., was appointed to the state panel charged with determining how to implement her plan.

Rell, facing a $466.5 million state budget deficit for the 2010 fiscal year, is pressuring the state legislature to approve a 3 percent cut to municipal aid. She said in Nov. 24 press release that while the 3 percent cut will be “deeply painful,” it is necessary because the state cannot afford a larger budget. State Senate Majority Leader Martin Looney, D-New Haven, who appointed DeStefano to the panel, said it will make recommendations on how to cut the $84 million from municipal aid before Dec. 15, when the General Assembly will start a special legislation session to deliberate state budget cuts.

Rell said in a statement Tuesday that municipal leaders were better qualified than state lawmakers to determine cuts in municipal aid and that she wanted their cooperation. But she will now have to cooperate with an old rival: DeStefano.

Looney said he appointed DeStefano because he is knowledgeable about public finance, adding that he would help represent cities on the panel, which comprises 12 municipal leaders across the state. (In addition to Rell, top state legislators could appoint members on the panel.)

Despite the friction in 2006, when Rell beat DeStefano in the general election by a margin of 2 to 1, Looney said the two “have a long relationship” and that DeStrefano’s participation on the panel will not “create any additional tension.”

Rell and state legislators wanted to represent a variety of viewpoints when appointing panel members, Rell’s spokesman Adam Liegeot ’94 said. Of the six panelists Rell appointed, three are Republicans and three are Democrats.

DeStefano said as a member of the panel, he hopes to have a “healthy dialogue” with other members and the state government over how to protect cities and their budgets.

“Significant rescissions [in municipal aid] can force cities and towns to draw into a deficit, lay off employees and consider mid-year tax increases,” DeStefano said in a statement to the News Wednesday. “These are consequences that Connecticut families cannot endure in this economy.”

Looney said because the panel has not made a recommendation, he was unsure how cuts to municipal aid will affect New Haven.

In addition to the cut in municipal aid, Rell announced plans last week to save revenue by canceling a planned decrease of the state sales tax to 5.5 percent from 6 percent. She also proposed a $116 million cut to programs in state departments, such as the Department of Social Services and the Department of Education.

Also on Tuesday, state Senate President Donald Williams Jr., D-Brooklyn, appointed Mansfield Mayor Betsy Paterson to the panel, and Rell appointed six officials from towns such as Somers and Portland.

Connecticut did not approve a budget this year until Sept. 8, a record 70 days later than July 1, the beginning of fiscal year 2009.

Esther Zuckerman contributed reporting.