At Monday's annual meeting, Groton City taxpayers approved a $17.4 million budget for the coming fiscal year, which would require a 21.69 percent increase in the tax rate.

The tax rate would rise 1.046 mills, from 4.822 mills to 5.868 mills.

The increase is due primarily to a dispute over highway funding with the town, City Mayor Marian Galbraith said. In April, the town council cut the city's funding request for roads by nearly half saying the city spends more per mile on its roads than the town does.

The city had asked for $1.92 million for road maintenance in the coming fiscal year, and town councilors cut $830,000. Galbraith has requested arbitration to settle the highway dispute.

Due to the cut, the city had to decide whether to lay off seven of the 10 public works employees who work on roads or add $830,000 in contingency funding to cover the cut. Even if the city prevails in the dispute, it would not receive the money in time to cover current spending as arbitration takes time.

The meeting of 17 residents voted unanimously to approve the budget.

“I understand what we need to do, but I think it’s deplorable what the town has done,” said Paul Duarte, who has lived in the city since the early 1960s. “I don’t think anyone can believe that taking $830,000, or 43 percent, is reasonable. The town definitely has an agenda, and one that they’re not willing to own up to.”

He believes the agenda is to “squash the city,” he said.

“This will not go unanswered,” he said.

The town has also set aside money in its budget to cover the $830,000 in case it loses the arbitration argument. That means people who live in the city are paying twice in the coming fiscal year – once on their town tax bill and once on their city tax bill, City Councilor Keith Hedrick said.

Shirleyann Dunbar-Rose, a longtime city resident, said she’s really upset.

“It still comes down to each citizen being treated equal and we’re not being treated equal,” she said.

The cut has fueled such anger that City Councilors are moving forward with a resolution seeking legal advice on how to obtain financial independence from Groton Town.

City Councilor Stephen Sheffield said the tax increase will be hard for everyone to swallow, but the city has to make due to get by.

“No one is enjoying it, that’s for sure,” he said. “The highway issues will be resolved at some point, and our tax rate will be adjusted.”

Groton City saw a 7.5 percent drop in its grand list, or the amount of total taxable property in town, and other revenues like interest income, which added to the financial pressure. Health care costs and pension expenses also rose in some departments.

The budget as originally proposed showed a decrease in spending of $17,161, or .1 percent. But that budget would still have required a tax rate increase of .34 mills, or 7 percent, to compensate for revenue losses. The budget will also use $650,000 from the undesignated fund balance to offset the tax rate.

Galbraith said the tax rate also affects businesses.

“I think this is a terrible thing to do to the taxpayers, but what are we doing to businesses?” she said. “Is this smart thinking?”

d.straszheim@theday.com

@DStraszheim