North Stonington - Residents struck down the town's second proposed budget Monday night, leaving the town without a budget even though the 2012-13 fiscal year began on Sunday.
The town's Board of Finance has already set its tax rate of 25.25 mills for the new year, but voters showed their displeasure with the $18.9 million proposal which was about 5 percent more than last year's budget.
Town Clerk Norma Holliday said 700 residents or 19.4 percent of the town's 3,602 registered voters cast ballots. That was 26 less than at last month's referendum.
First Selectman Nicholas H. Mullane II said the town would have to operate on last year's spending plan until a new budget can be ratified.
"I'm disappointed we didn't get it right the first time," Mullane said. "I can't complain about the voters; they're the boss."
At Monday's referendum, 447 residents voted against the $6.5 million general government budget, with 251 voting in favor of it. Residents defeated the $12.4 million school budget by a vote of 449-251.
The failed proposal included a 2.6 percent increase, or about $314,000, for the schools, which school board members said would have been used to hire at least one new faculty member, among other uses.
The general government budget would have increased by about $900,000.
Last month, taxpayers voted down a $20.8 million budget which was $2.8 million - or about 15.7 percent - more than last year's budget. It included a $500,000 increase in school spending and a $2.4 million increase in general-government spending.
Mullane said the Board of Finance has set a meeting for Thursday evening and "if they come to a consensus on what the budget should be," the Board of Selectmen would meet Friday morning to set a third annual meeting and a referendum date. Mullane said at the earliest, the referendum could be held at the end of the month.
"We've got three selectmen, eight Board of Education members and five Board of Finance members that have got to get right," Mullane said. "We've got a tough job, and we got to read the tea leaves right and respond to what the taxpayers want. I've been through it where it took four referendums to get through. I don't want to do that."