North Stonington — Though the late passage of the state budget delayed the process here, residents were able to dodge a prolonged town budget fight this year.

But another budgetary conflict is just picking up steam.

Nearly five months into the fiscal year, voters approved a $6,384,900 town budget at referendum Monday. However, that same referendum saw the defeat of the proposed $12.87 million education budget, which fell by just 10 votes.

The failure has prompted swift action from town officials. Although previous budgets have been passed later in the year, it is rare to enter December without having had at least two votes.

At a meeting Wednesday night, several officials expressed belief that the results of the first referendum were not an accurate assessment of residents' sentiments, citing poor timing, communication issues and low voter turnout — only 579 ballots were cast. Because of that, the hope is that, with better communication and increased awareness, the budget will pass.

But if it fails again, options to adjust it downward seem limited at best. The proposed budget already calls for a zero percent increase, and cutting it may not even be legally possible.

The Board of Selectmen will have a special meeting Friday to call for a special town meeting, the next step in the process of calling for a second referendum.

"We're in uncharted territory," Superintendent Peter Nero said. "I don't jump ugly at things, but we'll see what happens when the dust settles."

To this point, the school district has been operating under an education budget that is the same as the year prior. And the proposed education budget that was rejected was equal to the total cost of the budget from last year, though funds were allocated slightly differently.

If all goes smoothly, officials hope to hold the second referendum on Dec. 18. Passing the budget by that date would then allow the Board of Finance to set the tax rate and get tax bills out before the end of the year.

Where things could get very complicated, however, is if the budget also fails to pass at the second referendum.

Connecticut's minimum budget requirement prohibits a town from budgeting less for education than it did the previous year. And although some state legislation has enabled exemptions from that rule, it is unclear whether North Stonington meets the requirements for one.

Aside from the legislative hurdles, though, both First Selectman Mike Urgo and newly elected chairman of the Board of Finance Dan Spring expressed opposition during a meeting Wednesday night to the idea of cutting the education budget.

"I absolutely do not see any reason for cutting the budget, particularly with the outcomes that will be produced," Spring said, citing the high achievement of North Stonington's elementary and high schools. "Our district is doing a fabulous job with the money they have been allotted. They've had a zero budget increase, yet where it has been placed, it has developed impact and outcomes that lead to a more prosperous town."

In addition to that, the school district already is facing an uphill battle with a budget that had no increase.

"They gave me that zero and I followed that. I can't go below that, and, if I did, I'd have difficulty funding my school," Nero said. "I'll probably have some issues with cash near the end of the year."polychlorinated biphenyls, or PCBs, contamination, increases in salaries and changes in health care costs, expenses are on the rise without an increased budget to offset them. And ultimately, Nero feels that the consistent refusal to increase funding, let alone slashing it, eventually will reap educational consequences.     

Between the cost of renovation due to the 

"We're going to work as hard as we possibly can, but by the same token the analogy is if you squeeze olives, you get extra virgin olive oil," Nero said. "If you squeeze it too much, all you get is pulmus and pulp. I'm concerned about that."

c.clark@theday.com