WESTPORT — Gov. Dannel P. Malloy’s proposed state budget calls on Westport to pay almost $6 million in teacher retirement costs for next year, sending the town scrambling to find ways to make up the deficit.

The proposal shifts one-third, around $400 million for this year, of state teacher pension obligations to towns and cities. When asked if the shortfall will burden the Board of Education or the town budget, First Selectman Jim Marpe said, “We have joint ownership of the problem and working with the Board of Ed, I believe we will come to an appropriate conclusion. In the end, it all comes out of the taxpayer's pockets.”

Whether Westport will ultimately have to pay the $5.8 million in teacher pensions depends on what happens after it is scrutinized by the General Assembly. State Representative Jonathan Steinberg, D-136, who represents Westport, wrote in an email to constituents that Malloy’s teacher pension initiative should be “dead on arrival,” saying it would “add over five million dollars to our property taxes” and is “also likely to increase significantly in coming years, should this scheme be adopted.”

The Board of Education’s budget of $115.3 million, a 2.44 percent increase over last year, has already been rattled by the governor’s actions.

Since April of last year, Westport was cut $1.9 million dollars in Educational Cost Sharing funds, taking the total 2018 shortfall from the 2017 town budget to $6.9 million.

Director of School Business Operations Elio Longo said he factored in $545,000 in reimbursement grants from the state for special education tuition outside the district. But under Malloy’s proposal, that income is eliminated and a new special education grant of $198,000 is given to the town, leaving Westport with a gap just shy of $350,000. Longo added that if he had known this issue was going to arise prior to the Board of Education passing the budget on Feb. 6, the budget’s percent increase could be as high as 2.77 percent. The state cuts were announced in detail on Feb. 8.

As for an action plan, there is none, yet. “We have not formulated a strategy or proposal at this time. These are unprecedented times. What Governor Malloy is proposing is a shift of burden,” Longo said. “We will continue to look at cost efficiency and design.”

Longo said he will further examine staffing of the school district, utilities, replacement hires and health insurance rebids for any cost savings.

The town’s budget of $79.3 million, a 1.39 percent decrease from last year, will also be hit hard by Malloy’s changes. An undesignated fund balance of $27.5 million, maintained by the town and referred to as a “rainy day” or “savings” fund by Finance Director Gary Conrad will be used to combat the governor’s cuts.

“We’re going to have to pull some of that out of there,” Conrad said, referring to drawing from the undesignated funds. “We usually take some out to lower the taxes.”

The Board of Finance requires the fund to stay within 9 to 11 percent of the town’s operating budget — it now sits at 12.7 percent — and Conrad said the town is prepared to use up to $3 million from the fund to help control costs.

Keeping employee headcount down has been a priority for the Board of Finance as budget discussions have progressed.

“There’s a lot of work to be done in terms of looking at opportunities for expense reduction,” Marpe said.

Before Malloy announced his budget, Marpe lobbied at a town budget discussion, in front of the finance board, to keep the position of town operations director, a job left vacant by the sudden departure of Dewey Loselle. The job salary was proposed at $92,250. Now, Marpe said, he might scratch his request for the position.

“Any number of positions are up for discussion so I don’t want to be specific as to which positions at this point and time,” Marpe said.

The town has not yet developed “a complete reaction” to the cuts, Marpe said, adding that the town is meeting with the Board of Education to figure out a solution.

Also a consideration, under the proposal, is to end nonprofit hospitals’ exempt status regarding property tax. Through that Westport will be able to tax St. Vincent’s Behavioral Health Services just under $500,000, but in previous years, the town received a payment in lieu of taxes from the state for $173,000 so the net gain ends up being around $325,000.

Conrad is concerned that even if the town makes up the costs the state will come back to Westport with even more cuts after the mill rate is set.

“We don’t want to get blindsided, but you can’t tell at this point and time…It’s unfortunate they keep hitting Fairfield County so hard,” Conrad said. “It’s ridiculous.”

@chrismmarquette; cmarquette@bcnnew.com