New London — State legislators have saved a popular state-funded program that helps seniors and the disabled pay their rent, but city officials say it has come at a cost to the city.

New London abruptly has become responsible for about $195,000, or nearly half of the $400,000 distributed to city residents as part of the state renters’ rebate program.

And while local seniors may be breathing a sigh of relief knowing the checks will indeed be distributed again this year, Mayor Michael Passero said it is one more surprise hit to a lean city budget and, by extension, to taxpayers already suffering.

“It’s a worthwhile program but we’re the state’s No. 1 distressed municipality and here we are basically subsidizing a state program,” Passero said. “We’re struggling to provide home ownership opportunities for low-income families ... we have people on fixed incomes struggling to pay their property taxes. I’m not sure why they would transfer the cost of a state program onto the cities and towns.”

The state budget that passed last month shifted funding for the $26 million program, which helps 50,000 people statewide, to municipalities. The program provides up to $900 for married couples and $700 for individuals based on income, amount of rent and utility payments made in the calendar year prior to the application.

State legislators approved a so-called budget fix earlier this month that revived the program but at a lower cost to the state. Municipalities will pick up a portion of the costs — up to $250,000. The cap is another unfair part of the shift in funding, Passero said, since New London, with 709 recipients, and Hartford, with more than 6,000 recipients, will have to pay the same amount.

The state check covers a few months' worth of rent for local seniors like Karen Paul, who is on a fixed income and living in subsidized housing at the Mohican Apartments. Paul, who is chairwoman of the Senior Affairs Commission, said hundreds of people in New London rely on the program but have been assured the checks still are coming, albeit later than usual.

New London Human Services Director Jeanne Milstein said the city was inundated with calls from confused and worried residents when the news media reported that the state budget did not fund the program.

“People depend on this money. We are working hard to make sure the folks who are eligible receive the money for the holidays,” Milstein said.

Checks typically are distributed in early November but are expected sometime in late December.

New London Finance Director Don Gray said it is his understanding that the city will not have to send a check to the state for its portion of the program. Instead, he expects the state to subtract the nearly $200,000 from one of its grant payments to the city.

He expects a double hit to the city, since the “hold-backs” announced by the governor’s office last week to help plug budget deficits include a $214,000 reduction in state aid to New London. Alliance District or Educational Cost Sharing grants, which help fund the school district’s budget, appear to be taking the biggest hit, according to the initial estimates issued by the state Office of Policy and Management.

Gray said the city is trying to absorb the budget increases by limiting spending and counting on better-than-projected incoming revenues. At this point he said he has no intention of issuing supplemental tax bills to residents to make up for the losses.

g.smith@theday.com