Gov. Dannel P. Malloy proposed Wednesday across-the-board cuts to municipal aid in his revised 2016-17 budget, but most towns and cities would see an increase in their overall state funding, because of new grants, such as the sales tax revenue sharing and Payments in Lieu of Taxes some municipalities would receive.

Municipal aid statewide would total $2.7 billion in the governor’s proposed budget, an increase of $216 million from the 2015-16 fiscal year budget, according to spreadsheets accompanying the budget.

All municipalities would receive grants under a new category titled: “Municipal Revenue Sharing: Additional Sales Tax Funds.”

In that category, New London would receive $917,228, Norwich $1.36 million, Ledyard $442,811 and East Lyme $350,852.

Lyme would receive the smallest amount in the region at $31,470.

Under another new program that reimburses some municipalities for lost revenue from a new state-mandated cap on motor vehicle tax rates, New London would receive $668,057, and Norwich $2 million.

The new provision caps the municipal tax rate for motor vehicles at 32 mills for the 2016-17 fiscal year, and reimburses cities and towns a portion of the difference between the cap and the municipality’s higher tax rate.

But Norwich Comptroller Josh Pothier said the reimbursement for the lost motor vehicle revenue is expected to fall about $500,000 short of what the city would have collected in motor vehicle taxes using the current city tax rate.

A third new municipal revenue sharing category titled “select payments in lieu of taxes” is a one-time grant, Pothier said. Norwich would receive $259,862 in that grant, New London $1.35 million, Ledyard $3,012 and Montville $26,217.

Overall, Pothier said, he remains concerned about conditions that might be attached to some of the new grants, the uncertainty of mid-year cuts once the new budget year arrives and the status of other grants that come from various state agencies, including youth services, health district grants and school improvement grants.

Education cost sharing grants, the largest municipal education state grant, remains flat across the state at $2.058 billion.

All local towns would receive the exact amount they were slated to receive this year, according to the state spreadsheet, while state reimbursement for some school transportation would vary slightly town-by-town with some increases and some decreases in funding.

Betsy Gara, the executive director for the Connecticut Council of Small Towns, said Wednesday that the governor proposed 5.75 percent across-the-board cuts to municipal aid, except for education cost sharing.

He proposed replacing the aid with municipal revenue sharing for sales tax, but she said these funds could be more susceptible to mid-year budget cuts.

"We appreciate the efforts to keep towns whole, but we are very nervous that these funds are subject to cuts," she said.

Local leaders echoed her concerns.

Preston First Selectman Robert Congdon said the town’s total state aid package would increase by about $20,000 next year, with a $60,000 drop in various grant categories and roughly $80,000 in new sales tax revenue grant.

“The first time they have a blip, that whole $80,000 goes,” Congdon said. “But overall, it certainly could have been worse.”

East Lyme First Selectman Mark Nickerson said the town recently had more than $100,000 cut from its state aid for this fiscal year. He said he hopes the proposed revenues for fiscal year 2017 remain intact.

"Hopefully it stays where it is and doesn't get reduced any further," he said.

Lyme receives a small share of state funding, so “there wasn’t a ton of damage done to the town of Lyme” under the proposal, said First Selectman Ralph Eno.

But Eno pointed out that the education cost sharing and PILOT (Payment in Lieu of Taxes) grants weren’t being restored to the levels Lyme had received prior to this fiscal year. Lyme received no PILOT funding for fiscal year 2016, compared to about $16,000 in fiscal year 2015.

“We have lost $16,000 in PILOT (Payment in Lieu of Taxes) that is not coming back,” he said.

For fiscal year 2017, Lyme is slated to receive $139,702 in education cost sharing — the same as in fiscal year 2016, but less than the $145,556 the town received in fiscal year 2015.

North Stonington First Selectman Shawn Murphy noted that municipal aid appeared to be slightly up due to the additional sales tax funds offsetting a number of grant reductions, such as the town’s funding through the Mashantucket Pequot and Mohegan Fund, which was down $49,167.

Similarly, Ledyard Mayor Finkelstein, who attended Gov. Malloy’s speech, said it looked like Ledyard would also be receiving a slight increase in overall municipal aid.

“When you total everything up … it appears that there won’t be any issue with it,” Finkelstein said of the state funding.

Some local leaders said Wednesday they were still reviewing the information and new revenue streams.

"Since the numbers came out, the administration has been diligently trying to digest them and try to determine the exact implications on the proposed budget," said New London Mayor Michael Passero.

Broadly speaking, Passero said, the overall nearly $19 million cut in magnet funding was concerning, but it was unclear at this point whether or not it would have an impact on New London.

Groton Town Manager Mark Oefinger said Groton's budget was cut earlier and he thinks it's going to lose about $1,000 more. But he is not sure.

“I feel like I am missing something here,” Oefinger said. The comparison of state aid from year to year is confusing, he said.

“I don’t see any big reductions at this point, but I think it has a lot to do with the way it’s being presented,” he said.

Day Staff Writer Deborah Straszheim contributed to this report.