East Lyme — After an emotion-filled and lengthy public budget hearing that ran past midnight Monday, the Board of Finance voted 4-1 to restore $250,000 into the proposed $49.5 million education budget after it sought to reduce that budget by $500,000 earlier this month.

The education budget, as it was originally proposed, reflected a 3.19 percent, or $1.5 million, increase compared to this year’s spending plan.

With a $500,000 reduction from that proposed amount, though, Superintendent Jeffrey Newton warned town residents in a letter last week that such a budget cut would result in “detrimental” measures, including cuts to middle school sports, staff reductions across the district, reduced student programs, increased elementary class sizes and pay-for-play high school sports, among other changes.

Fueled by that letter and what the proposed reductions could mean, more than 500 residents, including teachers, students and town officials, packed the East Lyme Middle School Auditorium on Monday night to speak against the decision and urge the finance board to restore the money.

“We are not thriving. We are surviving,” Newton said during his presentation, which included an overview of how he and his board have sought ways to save hundreds of thousands in his budget over the years and how East Lyme, compared to other Connecticut towns, spends an average of $16,487 per pupil — lower than what New London, Stonington and Old Lyme pay, Newton argued.

“We’ve been fiscally responsible. We’ve had a zero-based budget, and we built this from the ground up,” Newton continued. “There is no fluff in our budget, and we have no room to operate. We might not make all these cuts, but a good chunk will happen.”

Explaining that nearly 97 percent of the education budget is made up of contractual obligations, which include salaries, employee benefits, transportation and tuition, Newton said the remaining 3 percent of the budget, which includes money for supplies, textbooks and software, is the only part his board has any flexibility changing but also is the area that includes sports and educational programs.

“Frankly, I’m tired of dipping into that (part of the budget) on a continual basis,” Newton said. “We are still providing one of the best educations in the state of Connecticut, and we are spending some of the least amount of dollars to do it.”

Despite Monday's $250,000 budget restoration, Newton maintained Tuesday that the areas he had highlighted, which included cuts from middle school sports and possible staff reductions, still are at risk.

“It’s all on the table right now,” he said Tuesday. “These are the areas we have to look at. And we still have $250,000 to work with.”

Newton added that he did not know specifically where he and the Board of Education would make cuts going forward, and that those decisions likely would be made after the budget passes at referendum.

At Monday’s hearing, finance board Vice Chair Lisa Picarazzi, who was filling in for Chair Bill Weber, said that the finance board had spent dozens of hours over the last few months trying to finalize a fiscally responsible budget that would not see a large tax increase.

She said the town is expecting $1.2 million less in revenue this upcoming fiscal year, with a $680,421 reduction in Education Cost Sharing aid from the state. The town also will use $500,000 less from its fund balance next year to help maintain a favorable credit rating score, which took a slight dip last year with one credit rating agency. In addition to that, the finance board also made reductions from the proposed general government and capital improvement budgets.

“We have to take a look at teacher pensions and insurance incentives,” Picarazzi said, explaining that the town also likely will be required to pay more into pension costs, while health insurance costs drive up the budget every year.

“The Board of Education has taken absolutely no ground on (health insurance incentives), and we were thinking if we cut, they may look at ways to incentivize” employees to consider health insurance options outside of the district,  Picarazzi said. “We are pro-education and we want the same thing you want. We are not a bunch of evil people who hate education.”

Responding to Picarazzi’s concern Tuesday, Newton said the district "already has some incentivizing going on" as part of its already-existing health insurance contracts. 

"Can we continue to do that more? Yes, we can. But we have contractual agreements that go three years out,” he said. “At this point, there are a lot of other things we need to look at as it pertains to savings, but we will take that advising from the Board of Finance."

Having calculated the proposed $500,000 education budget reduction into the total town budget — which the Board of Finance had proposed at $73.9 million — Picarazzi said at Monday’s hearing that residents could expect to pay a projected mill rate of 28.08 next year, which is 0.73 mill higher than this year’s rate.

That projected mill rate would mean a home assessed at $250,000 would pay an increase of $183 in taxes next year, while a home assessed at $450,000 would pay an additional $329.

With $250,000 added back into the education budget, however, Finance Director Anna Johnson said Tuesday that the projected tax rate now stands at 28.19 mills.

Even with the understanding that a higher education budget would equate to increased taxes, those present at Monday’s hearing insisted — whether through personal stories, dramatic demands or inspirational speeches — that they were willing to spend more to maintain the quality education that they said East Lyme is known for.

“Tonight’s the night we cross the line and we tell these kids they don’t have the same opportunity we’ve had. These students will not have the same opportunity your students had,” Niantic Center School Principal Jeffrey Provost said to the finance board, assuming the $500,000 would go to referendum. “Once we cross the line from uncomfortable to this, we are not going to get it back. Tonight’s the night we make that decision.”

The Board of Education will continue its budget deliberations at its next scheduled meeting May 20. The annual town meeting to discuss the budget further is scheduled May 13, while a referendum on the budget will be held May 23.

m.biekert@theday.com