New London — Mayor Michael Passero on Thursday presented a proposed budget for fiscal year 2017-18 that represents a 5 percent increase, a 6.1-mill tax hike, and is based on what Passero called an “unprecedented level of uncertainty in predicting state aid.”

Passero referred to the tax increase associated with his spending proposal a “worst-case scenario for the city,” and said it was contingent on a host of spending proposals by the governor that are now being debated in Hartford.

“I want everyone to go away from this evening knowing that I cannot foresee myself ever signing a budget that requires a 6-mill increase in taxes,” Passero said.

The $92.8 million proposal represents a $5.1 million increase over the adjusted budget for fiscal year 2016-17 and would bring the city’s tax rate to 46.61. One mill is equal to $1 for every $1,000 of assessed property value.

More than half of the tax increase, or 3.3 mills, is attributed to aspects of the proposed state budget: a mandate by the state to contribute $2.2 million toward the state teacher retirement fund and the potential loss of $1.7 million in Education Cost Sharing grant revenue.

The proposal contains $41.7 million toward the Board of Education’s proposed $69.8 million proposed budget. It is actually a drop from last year’s figure but would require about $1 million, or 5 percent, more from taxpayers, or about $20.4 million overall. The ECS funds cover the rest of the $41.7 million school budget funded through the city.

“I believe (School Superintendent Manuel Rivera) is facing at least as difficult a budget as the city is,” Passero said.

Despite the 5 percent proposed increase in the city’s overall budget, Passero said city services will remain level or continue to erode. It’s because most of the rest of the proposed increase is attributed to fixed costs: a $600,000 increase in debt service, $450,000 in health insurance, $470,000 increase in contributions to the Connecticut Municipal retirements System and $325,000 in personnel costs. No new positions, programs or initiatives are planned.

“My hope and reasonable expectation is that, during the next two months, there will be greater certainty regarding the state’s biennial budget and the municipal budget the council eventually adopts will not require the mill rate increase that had to be conservatively built into the proposed budget I am presenting to you today,” Passero told the City Council during his presentation at City Hall.

The governor’s proposed budget could provide the city with an added $5.6 million under a proposal to collect property taxes from hospitals, in the city’s case Lawrence + Memorial. The school district would stand to gain more than $8 million under a new special education fund. Those gains would be slightly offset by a $1.8 million drop in PILOT funds and $1.6 million loss in ECS funds under the governor’s proposal.

Attending Thursday’s presentation was state Sen. Paul Formica, R-East Lyme; state Rep. Chris Soto, D-New London; and state Rep. Joe de la Cruz, D-Groton. Formica is co-chair of the state Appropriations Committee.

Having been a first selectman himself, Formica said he understands the difficulties that leaders of cities and towns around the state are having.

“You kind of throw a dart at a number to try and figure out what the state is doing,” Formica said. “So we’re very mindful of that. Given that the proposal by the governor is universally questioned by both sides, there’s been a lot of conversation.”

He said he would push to get a state budget out by mid-May. The City Council must submit a budget to the Board of Finance by May 1 and pass a budget by June 1.

Soto said the biggest continuing conversation in Hartford is how to retool the ECS formula and called it a “moving target.”

“I think it was prudent to present the worst-case scenario, but I think it’s probably going to get better,” Soto said.

Passero’s budget proposal was handed out to city councilors at Thursday’s meeting and councilors said they would reserve comment. Budget deliberations start next week.

Passero ended his presentation with a bit of optimism, predicting growth and major development projects to grow the city’s anemic grand list of taxable properties.

“Despite this year’s difficult budget, I am extremely bullish of the city’s future and in our ability to provide a more sustainable and competitive property tax rate in the coming years,” he said.

g.smith@theday.com