Stonington ― The Board of Finance voted 4-3 Tuesday to make no changes to the proposed 2023-24 budget that calls for a 4.4% spending increase after a public hearing at the high school.

Members Bob Statchen, Mike Fauerbach, and Chris Johnson voted against the budget.

“I trust you to respect the most vulnerable in our town and show financial restraint,” Pawcatuck resident Laura Graham said.

Residents will vote at a referendum in May on whether to approve the budget.

The proposed budget reduces the tax rate to 17.45 mills while increasing spending by $3.4 million. The board was able to do this in large part because of an increase in the grand list due to the revaluation and the use of $3.8 million from the town’s $19.6 million undesignated fund balance to offset the tax rate.

Graham, one of approximately 40 residents in attendance, spoke in support of the $80.2 million budget proposal saying the board’s proposed 6.2-mill reduction to the tax rate would protect residents from large increases in property taxes, which could cause significant hardship in an unusual year that saw both a revaluation and inflation.

Ocean Community YMCA President Maureen Fitzgerald discussed her organization’s request that the town allocate $125,000 towards the YMCA’s $600,000 project to build a shelter for its Camp Cove youth summer program. She said the YMCA provides many services to residents of all ages and asked the board to increase funding for the project. The board approved a $25,000 contribution to the project.

Most of the opposition to the proposed budget came during board discussions after public comment concluded, when three members shared their concerns about some unfunded capital improvement projects and the amount of money being taken from the undesignated fund to lower the tax rate.

Johnson said he was in favor of increasing funding to the YMCA and said he was concerned about cuts made to capital improvement projects such as repairs to White Rock Bridge and seawalls, and the amount of undesignated funds being used to offset budget increases.

Fauerbach echoed similar concerns, and said that cuts to the capital improvement budget merely pushed off the necessary improvements to next year. He noted expenses such as White Rock Bridge repair costs, information technology storage costs, emergency lighting and highway equipment could be funded this year for $647,000 and only raise the proposed tax rate by .16 mills to 17.61.

Statchen said he was strongly opposed to many of the cuts as well as the use of $3.8 million from the town’s undesignated fund, and that the current budget was not sustainable in the long term.

“This year, the Board of Finance is proposing to fund operational increases—in other words ongoing expenses—by using $3.8 million of the fund balance—more than doubling our reliance on the reserve fund,” he said.

He pointed out that in fiscal year 2021-22, the board used none of the fund balance, and in 2022-23, the board used only $1.5 million.

“What happens when the unassigned reserve fund balance is fully depleted in two years,” Statchen asked, saying that residents would see either education budgets and town services drastically cut or significant increases in taxes.

He argued that it would be more responsible to use only $2.2 million of the fund balance resulting in a 3% tax increase. He said that across the state, tax rates range from 11 to 74 mills, and that the town’s current 23.66-mill tax rate ranks the community 144th out of the 166 municipalities in the state.

“In other words, we do not have an onerous tax burden in relation to our peers,” he said adding, “I would anticipate that in one to three years, there will be a need for double digit tax increases.”

Chairman Timothy O’Brien pushed back against Statchen’s arguments, defending the use of the undesignated funds.

“I don’t think the town should be a savings bank. I don’t think we should be holding taxpayers’ money as much as we are,” he said.

Members Bryan Bentz and Lynn Young agreed, saying the money in the fund belongs to taxpayers and should be returned to them.

Town policy and recent practice is to keep two months of operating expenses plus and an additional $1 million in the fund, or $14.3 million of the $19.6 million fund balance. If the budget passes the fund would have $2.6 million than the two months operating expenses and the $1 million cushion.

Editor’s note: This version corrects details about the current tax rate, tax rate decrease, increase in expenditures and details about the surplus fund.