New London ― What was expected to be a routine City Council vote next week to approve the proposed 2024-25 city and school budgets has gotten more complicated with the loss of $800,000 in expected state education aid.
The council is slated on Monday to hold its third and final reading on the $57.13 million general government and $47.86 million education spending plans.
But councilors will first have to figure out how to make up the short in Educational Cost Sharing (ECS) funding and create a balanced budget they can approve.
The problem, city Finance Director David McBride said, grew out of a series of miscommunications between city officials, state legislators and the Connecticut Conference of Municipalities over a period of months.
“We were told to use 2025 ECS figures included as part of the passed 2024 state budget,” McBride said on Friday. “Those figures gave us an $800,000 increase in those funds.”
But by the time the General Assembly session ended last week, that number had changed.
“Lo and behold, the amount for us was $800,000 less than we were told to budget for,” McBride said. “Looking into it, we found the bottom-line number of ECS money made available across the state hadn’t changed, but the amount we got did.”
The city is in line for roughly $30 million in ECS funding this year.
McBride said the formula used to calculate New London and other municipalities’ share is based on several factors, including enrollment and resident income data. ECS money is paid to a municipality that uses it to offset the amounts taxpayers pay to fund school district budgets.
“So right now, we don’t have a balanced budget,” McBride said.
Councilors have a few budget-balancing options to choose from, Mayor Michael Passero said.
“They could simply reduce the Board of Education budget by the loss amount, or raise the mill rate – which I don’t think will be a palatable option,” he said.
Passero said the council, which meets at 7 p.m. Monday in City Hall, could instead select a middle path that would require splitting the $800,000 shortfall amount between the city and school budgets.
“We are preparing a list of cuts on the city side that’s pretty close right now to making up half that ECS shortfall number,” Passero said. “The idea would be to take those savings and transfer them to the school side.”
The budgets, if approved without change, would translate to a tax rate of 27.50 mills, a drop of nearly 10 mills from the current tax rate. That drop is largely attributed to a recent property revaluation that saw the average assessed value of residential properties in New London increase by 60%.
City officials warned the proposed budgets would entail an average residential tax bill increase of $750.
The Board of Education previously approved an $83.2 million proposal that required $50.8 million in funding from the city ― a $4.5 million jump from the current year.
Board of Education President Elaine Maynard-Adams said the district has not modified that proposal since it was passed and won’t do so until a final budget is approved.
Maynard-Adams said she’s still trying to clarify whether the $800,000 shortfall is coming from ECS funding, or from a separate state Alliance District grant. She said plans are in place to meet any reductions directed by the council, including another $400,000 in cuts.
“I can live with that, as long as there’s an understanding that if that $800,000 loss turns out to be from Alliance funding, we get reimbursed by the city later,” she said.
Maynard-Adams, Passero and McBride all said it’s extremely unusual not to have largely finalized spending plans in place so late in the budget season. While the council could vote on final budgets on Monday, they have until May 31 to approve the plans.
“I’ve never seen it get this far,” McBride said.
j.penney@theday.com
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