New London ― During his annual budget address to the City Council on Monday, Mayor Michael Passero unveiled a proposed $104 million budget for 2024-25 that would translate to an average residential tax bill increase of $750.

The budget proposal calls for a 2% increase each to general government and education spending.

The plan includes $57.3 million in city government spending, a $1.08 million jump from the current year, with major cost drivers including expanded funding for the police department.

Finance Director David McBride said the plan sets aside an additional $827,000 for the hiring of a new deputy police chief and the funding of new officer positions.

The finance department would receive $176,000 more next year to cover the cost of a new personnel benefit specialist and to cover Passero’s full $160,000 salary for the year ― only six months of the mayor’s salary was allotted for fiscal year 2024, an election year.

The plan includes $46.8 million for the Board of Education, a $916,181 increase from the current year.

The board in February approved an $83.2 million budget to be funded with $50.8 million in city money, or $4.8 million more than this year. District officials said their increased budget request was driven by the anticipated loss of $10.9 million in federal pandemic relief funding.

Education spending is funded jointly with state and city taxpayer money. About 45% of the total city budget is allotted for school funding. Because the state grant funding is not expected to increase, city taxpayers will be asked to fund about 5.4% more in education spending compared to the current year.

If Passero’s budget is approved in May by the council, it will mean a mill rate drop of 10 mills, from 37.2 to 27.5. That drop is largely attributed to a recent property revaluation that saw the average assessed value of all real estate, personal property and residential properties in New London increase by a “remarkable 34%,” Passero said, adding that residential property values alone jumped by an “astounding 60%.”

But Passero warned the new tax rate would result in an average tax increase of $750 to residential properties.

“The disparate rise in the market value of residential properties has triggered the first increase in property taxes for most homeowners and landlords in six years,” Passero said, decrying the state’s “regressive” property tax system and a revaluation system the city has no control over. “The more we lowered the mill rate to offset the disproportioned increase in residential values, the greater the loss in tax revenue from the commercial sector. This is truly a no-win situation.”

Passero highlighted several bright spots, including a growing tax base, economic growth and the addition of more than 1,000 new housing units, from subsidized to market-rate, in the city.

He also lauded back-to-back yearly bond rating upgrades, the incoming recreation center and a “booming” local maritime industry centered at the State Pier wind turbine staging area.

“We have overcome skepticism that has choked off our progress for far too long,” Passero said. “Together, we have become a city that has dared to believe in its own success.”

Passero’s budget plan in the coming weeks will be discussed in detail by the council. He said he’d “resist any changes” to the spending plan that would result in a higher-than-proposed mill rate increase.

“This is a frustrating situation,” Passero said. “I am presenting you with a proposed budget with the barest minimum increase in taxpayer support.”

j.penney@theday.com