Norwich — School administrators are projecting the current school budget will end in a shortfall of $1.5 million to $2 million by June 30 and will send the totals to the City Council with a request for funds to cover the deficit.

The Board of Education Budget Expenditure Committee learned of the projected deficit for the 2017-18 fiscal year during a meeting Thursday evening. School Business Administrator Athena Nagel said nearly all the deficit is in special education costs and special education transportation costs, along with a $600,000 deficit in health insurance costs.

Nagel said she updated the figures recently before presenting them to the budget committee, “since I did the numbers, five more (special education) students came into the district.” Norwich has seen an influx of about 100 new special education students in the past 18 months, Nagel said.

Part of the special education deficit was expected, because Norwich expects to receive about $700,000 less in state special education funding this year through the complex special education excess cost sharing formula. Through the formula, Norwich must pay the first $75,000 per year cost for any special education student. The state pays 73 percent of the cost in excess of $75,000. But the $75,000 spent does not include the support services the Norwich school budget pays for individual Norwich special education students — speech pathologists, other specialists and nursing support — at Norwich Free Academy. Those costs do not qualify for state reimbursement, Superintendent Abby Dolliver said.

Nagel said the projected deficit was calculated after subtracting the state excess cost sharing reimbursements the city expects to receive.

Along with the projected school budget deficit, the city government side of the budget also expects to end June 30 with a deficit, city officials said. The 2017-18 city budget was finalized last June, long before the state budget was enacted. State aid to the city in various grants was cut by more than $1 million, City Manager John Salomone said.

Salomone and Comptroller Josh Pothier will meet in the coming weeks to solidify the city’s projected deficit to present the figures to the City Council. He said city leaders anticipated at the time the budget was passed that any changes to state aid might have to be absorbed by the fund balance. As of June 30, 2017, Norwich’s fund balance was a healthy $17.7 million, 14.47 percent of the combined city and school operating budgets, above the city’s target of 12 percent.

“The only place to cover it would be the fund balance,” Salomone said of both projected deficits. “And that would have to be appropriated by the City Council, if they so desire.”

The school board’s request for deficit funds will come as city and school officials are wrestling with the proposed $83 million 2018-19 school budget that calls for a 9 percent spending increase over this year. Salomone has proposed a 2 percent increase for the school budget, and the Board of Education has stated it could seek legal action if the City Council does not approve adequate funding for the school system.

The Board of Education and City Council will hold a joint budget workshop at 6 p.m. Monday at Kelly Middle School.

c.bessette@theday.com