New London – The City Council has already cut the positions of two city employees and expects to add more to the list as it continues to cope with losses in state revenue.

Mayor Michael Passero on Monday presented a bleak scenario in the event the state adopts the Republican-crafted state budget passed by the House and Senate. Under the spending plan - a proposal Gov. Dannel P. Malloy has promised to veto – the city stands to lose an additional $1.6 million in municipal aid.

As a precaution, Passero has proposed that the city prepare by a cutting at least $1.6 million from the city government side and $2.5 million from the school side in order to maintain the current tax rate. School officials are under the impression some or most of the $2.5 million would be reimbursed in other ways.     

“I think at this point we have to work from these numbers because this is the position Governor Malloy is going to be negotiating from,” Passero said.

The result is that the loss of a senior accountant in the finance department and a public works administrative manager – both positions were cut last week by the City Council – will not be enough.

Cuts that would eliminate the assistant city clerk’s position, three more public works positions and not fund summer youth recreational programs are among a host of other options still being discussed. The council's finance committee on Monday started the grim work.

“We’re in a crisis … trying to exhaust every avenue,” said Councilor Efrain Dominguez.

Passero said he also is in talks with union leaders to explore the possibility of offering early retirements.

And while residents have already been hit with a more than 9 percent tax hike, Passero said a supplemental motor vehicle tax bill could be on the horizon. City residents were spared paying taxes on the city’s full 44.26 mill tax rate for vehicles because of reimbursement from the state that capped the tax rate at 37 mills. The reimbursement would go away under the proposed state spending plan, Passero said.

Interim School Superintendent Stephen Tracy, joined by school finance director Rob Funk at Monday’s meeting, announced that the school district is facing an additional $1.8 million shortfall and exploring how many of more than 17 unfilled positions could be frozen or eliminated.

“So far we’ve avoided targeting positions that would result in actual layoffs and the unemployment costs that come with it,” Tracy said. “Unless state funding turns out to be surprisingly generous, and I don’t think anybody in this room is holding their breath on that, most of the positions … will likely need to be sacrificed to deal with the current gap.”

The City Council, even without the drastic drops in revenue associated with the current state budget proposal, needs to come up with budget cuts to satisfy a budget petition calling for reductions.

The council earlier this month repealed its city and school spending plans and is now working from last year’s budget. The council plans to vote on proposed cuts before city spending reaches 25 percent of the budget or by charter the $90.05 million budget will revert to last year’s $88 million budget.

g.smith@theday.com