New London – Mayor Michael Passero presented a proposed $92.8 million budget Monday accompanied by a healthy dose of optimism about the city’s economic future during his annual state of the city speech.

“Our city is riding out the state’s fiscal storm like a well-found boat with an able crew,” Passero said. “We are storm-weary but we are resilient and tenacious.”

The nautical references alluded to the losses in state revenue the city sustained last year and which helped push the city’s tax rate up by nearly 7 percent. It also led to cuts to nearly every city department, layoffs and no increase in school spending.

By comparison, the $92.8 million spending plan Passero passed on to the City Council on Monday shows a modest 3.16 percent increase in spending compared to  the current budget.

The plan provides $49.86 million for city government spending, a 4.95 percent increase over the current $47.5 million budget. Passero attributes much of the increase to the $2.3 million rise in debt service along with increases in other so-called fixed costs – health benefits, wages and insurance premiums.

Passero said the budget includes funding for one additional police officer but includes cuts to many departments and elimination of three positions. He did not detail from which departments they would come.

The city's proposed $42.93 million contribution toward the school board's budget provides a 2.5 percent, or $488,000, increase in taxpayer spending. It is well short of the $2.5 million increase in taxpayer funding requested by the school board to support its proposed $69.9 million budget.

The City Council funds roughly two thirds of the school budget through taxes and the state's Educational Cost Sharing program. The remainder of the school budget is grant funded.  

The tax impact, if the plan passes without any alterations, would increase the city’s tax rate from 43.17 mills to 43.58.

“Our city must continue to wean itself off dependence on state aid,” Passero said. “That goal can be achieved by seizing upon the great economic opportunities that are presenting themselves to our city daily.”

Passero said the city stands to “regain economic prominence,” by partnerships with Electric Boat, Cross Sound Ferry, Yale New Haven Health and “on the horizon,” off shore wind energy companies. He said perennial revenue challenges might also be offset by development in the pipeline, including two large residential developments.

In the meantime, he said the goal of the budget this year is to “persevere for the present,” an attempt to “preserve the services that make our city an attractive place to live, work, invest and play while holding the line on taxes.”

The City Council has scheduled a series of finance committee meetings in the coming days to start its budget deliberations. Passero warned the council of the inevitable “angry voices,” “unreasonable people,” with opinions formed on “misinformation and untruths.”

“Good public policy should be based on good data and fact,” he said.

Passero paused during one emotional moment at the end of his speech, calling it a “John Boehner moment."

“This is a great, great city with the greatest of people,” he said. “We share the same dreams and the same goals for our city. We must ignore the voices that wish to divide us because of our differences and whose principal goal is to undermine confidence in our government. If we stand united in our common purpose, nothing can stop the greatness that lies ahead for our city.”

 g.smith@theday.com

Editor's note: This version of the story corrects the budget total.