In his State of the State Address back on Jan. 4, Gov. Dannel P. Malloy delivered a few lines that had municipal officials tugging at their collars. He has said nothing since to make them breathe easier.

“The state provides a total of $5.1 billion in municipal assistance. That’s more than one-fifth of our overall budget this year, making it our biggest single expense – not state employee pensions, not Medicaid, not debt service, not salary and benefits of our employees. Town aid accounts for the largest portion of our state budget,” Malloy told members of the General Assembly.

“It simply would not be fair for us to talk about continued state agency reductions, or talk about the need for labor concessions, without talking about new ways to provide town aid,” continued the governor.

“New ways” means “less aid” for some.

Malloy first came into office after the 2010 election pledging to maintain funding for municipalities. But after seeing his state workforce shrink by nearly 10 percent — amounting to 5,000 fewer full-time employees — the governor is preparing to put municipal spending reductions on the table when he releases his budget proposal Feb. 8.

Addressing the Connecticut Council of Small Towns at their meeting in Rocky Hill on Wednesday, a group representing 110 towns with populations less than 30,000, Malloy was not reassuring.

The Malloy administration is preparing, in particular, to target how Connecticut subsidizes local public education, and with good reason. Of the $5.1 billion distributed to municipalities, 81 percent of that – $4.1 billion – is educational funding, and that excludes school construction financing. It accounts for about one-quarter of Connecticut’s bonded debt.

Since taking office, Malloy has pushed the legislature to boost financial support for low-performing school districts, and points to some success with increased high school graduation rates and higher numbers of black, Hispanic and lower-income students taking advanced placement courses. About 90 percent of increased education aid has been directed at the 30 percent of the lowest-performing districts.

The governor is preparing an education funding formula that would bake in that philosophy, directing state aid to communities with lower-income families and limited commercial tax bases, meaning largely, but not exclusively, urban centers.

Asked by small-town leaders what that could mean for them, Malloy reminded them of the state’s fiscal challenges and their often far better bottom lines.

“I note that I recently reviewed the cash balance of all the communities represented in this room, and with respect to cash balance, you’re all in substantially better shape than we are,” he told the gathering of the Council of Small Towns.

In December, Malloy ordered a $50 million cut in state aid to municipalities, which included a $20 million reduction in education funding. Coming in the middle of the fiscal year, with less time to adjust, it has proved particularly difficult for some communities.

Now the governor is wrestling with a projected shortfall of around $1.5 billion for the fiscal year that will begin July 1.

He is right that his ability to wring further savings out of state services is reaching an end point and that a portion of the budget that accounts for one-fifth of spending cannot be ignored. Yet cuts in municipal aid can amount to a backdoor tax increase, when local officials are forced to raise property taxes to maintain services.

Yet changes in the “ways to provide town aid” cannot include cuts alone, but must also lighten the burden the state places on municipalities.

The state should end its mandate that towns meet a “minimum budget requirement” for education spending even when enrollments are decreasing and a community has demonstrated its ability to be fiscally frugal while providing a quality education.

Connecticut needs to rethink how it pays for and manages special education, avoiding the budget-busting hit a small town can take when a few families with special needs children relocate there.

The legislature should look to end some of the mandates that raise the cost of providing services and an education, mandates that often produce no clearly demonstrated benefits.

If Malloy and the legislature want to find savings in how the state provides municipal aid, they also need to come up with ways to help municipal officials more prudently manage their expenses as well.