Stonington — The Board of Finance cut $410,000, including $110,000 for education, from the proposed 2018-19 budget late Wednesday night before agreeing to send a $70.25 million package to the Board of Selectmen.

The selectmen will now set a town meeting and a referendum vote later this spring.

The budget shows a more than $2.3 million increase compared to the current budget, in large part due to a $1.8 million hike in debt payments caused by the $67 million elementary school project.

The proposed tax rate is 22.68, a decrease of 0.3 mill. The board was able to minimize the tax impact on property owners by applying $2,850,000 from the town's undesignated fund balance as revenue.  

The small decrease, however, is in large part due to the revaluation, which showed a grand list increase of 4.6 percent. To accurately determine whether the proposed budget would increase their tax bill, property owners must multiply their new assessment by the proposed tax rate and then compare that to their current tax bill.

The $21.6 million general government budget is up about $400,000, the $2.5 million capital improvement budget shows an $800,000 decrease and the $38.1 million school budget is up $1 million. Debt payments are rising from the current $6.3 million to $8.1 million.

Just a handful of people asked questions or commented during the public hearing that preceded the board’s decision Wednesday night.

Kaylan Randolph, the vice president of the Stonington Free Library’s board of trustees, asked the finance board to increase town funding for the library from the proposed $147,000, which is what the town allocated the past two years. The library had sought $257,402.

“Residents need a 21st century library but we can’t maintain our current operations without an increase in funding,” Randolph told the board.

Board members did not increase the funding but said library officials could approach the board for a supplemental appropriation once the town knows how much it will receive in state aid.

When the board cut the school operating budget by $110,000 and another $65,000 in school capital improvements, Superintendent of Schools Van Riley commented that the cut was a little more than he expected. Riley had presented a budget that showed an increase — 2.9 percent — that was under the 3 percent limit the board had requested.

“But we’ll make it work,” he said.

Board members warned that avoiding a large tax increase will be even more difficult next spring, when they put together the 2019-20 budget.

That’s because state education aid could be cut even more and, more importantly, the town’s debt payments will increase another $900,000. Unlike in the proposed 2018-19 budget, it is unlikely the board will use another $2.8 million from its undesignated fund surplus to offset the impact of the debt on the tax rate. That’s because doing so would cut into the approximately $10.6 million that the town needs to keep in the fund to maintain its high bond rating. That rating allows the town to save millions when it borrows money for projects such as the elementary school renovations.

The bleak budget picture for 2019-20, coupled with the $410,000 spending cuts made by the board Wednesday, prompted board member Lynn Young to suggest using less money from the undesignated surplus account in the 2018-19 budget and instead save it for 2019-20. Doing so would have meant a higher tax rate in 2018-19.

“I’m worried about next year. It took us decades to build (the fund) up,” she said.

Board members, however, favored using the $2.8 million from the surplus for 2018-19. Board member Mike Fauerbach pointed out that the town has been penalized by the state in the form of decreased state aid because it has amassed such a healthy fund balance over the years.

“I’d rather we spend it,” he said about preserving too much of it.

j.wojtas@theday.com