East Lyme ―Voters in May will be asked to approve a 4.3% tax increase as part of a budget season marked by inflation, dwindling pandemic-relief aid and big building projects coming due.

The $86 million proposed budget for 2023-24 is up $5.8 million, or 7.2%, from the current budget.

A taxpayer with a home assessed at $300,000 would pay $5,223 in property taxes in the coming year based on the proposed budget, according to the finance department. That’s an increase of $216.

The finance board reduced the impact to taxpayers by using $2 million from the town’s rainy day fund, formally known as the undesignated fund balance, to help offset the tax increase.

The tax rate based on the proposed budget would rise by 1.03 mills to 24.87 mills.

Without using the rainy day fund to lower the tax burden going forward, the same homeowner would owe $370 more than the current year, according to finance director Kevin Gervais.

He said using $2 million in savings would bring the fund to roughly 12-13% of the total operating budget. If left untouched, he predicted the fund would be at 15% when the fiscal year ends on June 30. That’s where finance board members have said they’d ideally like to keep it.

A comfortable fund balance helps towns secure higher bond ratings, which translates to favorable interest rates on bonding projects. It’s also an important source of funding in case of emergencies.

The proposed budget consists of $21.5 million in town operations expenses representing an increase of $1 million, or 4.9%, over the current budget. The $57.8 million Board of Education proposal comes shows an increase of $3.7 million or 6.8%.

The $6.2 million debt service line shows an increase of $1.3 million, or 26.4%. That’s because the principal is coming due on multiple bond projects, including the $38 million in elementary school renovations completed several years ago.

Proposed capital spending comes in at $610,840, which is $67,909 less than the current budget.

The Board of Finance last week sent the budget proposal to a May 8 town meeting. Registered voters and eligible taxpayers will have the chance to go to the polls on May 18.

The million dollar question

The school budget has fluctuated by about a million dollars as it made its way through this year’s budget process. First, Superintendent of Schools Jeffrey Newton recommended $1.1 million in cuts that would have eliminated 18.5 positions. Then an outcry from teachers, students and teachers led the school board to reinstate those positions. Then last week the Board of Finance removed the $1.1 million again.

But this time around, Newton said fewer positions will need to be cut and none of them will result in layoffs. That’s largely because officials identified $475,000 in savings from updated health insurance figures that came in lower than anticipated.

Cuts in the current budget include a technology position, an elementary school teaching position, two part-time teaching positions and five paraeducator positions. Newton said the school board is still deciding which teachers or paraeducators will be affected and where they might be assigned to fill a vacancy elsewhere in the district.

“Everyone will have a job next year even with position reductions,” he said.

At a sparsely attended public hearing on the budget proposal Monday, union representatives for teachers and staff members expressed support for the proposed budget.

Scott Mahon, president of the East Lyme Teachers Association and a teacher at East Lyme High School, said voters must approve the proposal as it stands because the “razor thin” budget can’t sustain further cuts.

“Our students cannot afford any more cuts than what has occurred to this point,” he said.

New police officers

The town operations side of the budget includes funding for two new police officers, a firefighter and a deputy finance director.

Seery during a presentation at the public hearing said the proposed budget includes funding for two officers to begin the regional police academy in November, which will save eight months in salary and benefits between the two positions. The budget year begins July 1.

Approximate starting salaries with benefits for new officers range from $86,500 for officers who only need insurance for themselves to $100,000 for officers who need family health insurance coverage, according to Board of Finance meeting minutes.

Seery said the deputy finance director position is necessary to ensure cost effectiveness and accountability. That means getting better pricing on big purchases and streamlining the auditing process.

The town did not submit its 2021 financial audit to the state until about six weeks ago and still has not submitted its 2022 audit, which was due in December.

Meeting minutes from the February meeting of the Municipal Finance Advisory Commission show Seery and finance director Kevin Gervais were at the meeting to explain why the not-yet-submitted 2021 audit was so late. Seery told commission members that audit reports for years have included a recommendation to hire a deputy finance director for the understaffed department, which the first selectman said would likely eliminate the late audit filings.

e.regan@theday.com

Editor’s note: This version corrects the proposed tax rate, its increase and its impact on tax bills.