WESTPORT — Over $3 million needs to be cut between the $126.8 million Board of Education budget and the $79 million town budget.

With the town facing an $8 million shortfall, the Board of Finance chose to reduce the overall $206 million budget by $3.5 million on Monday, saddling the school board with $1.67 million of cuts and the town with $1.02 million in reductions. The remaining $800,000 is expected to be offset by the sale of a Board of Education property on Riverside Avenue, a property not yet on the market.

Finance Director Gary Conrad said the town plans to draw $3.5 to $4.5 million from its undesignated fund balance — a “rainy day” or “savings” fund.

The cuts come at a time when the state is under considerable financial stress: Since April, the town lost $1.9 million in state Educational Cost Sharing Funds and Gov. Dannel P. Malloy’s budget proposal shifts $5.9 million of teacher pension obligations on to Westport.

Although board members including Brian Stern and John Hartwell were confident the town will not have to foot the entire $5.9 million in teacher pensions, there is still a strong feeling taxes will increase, even if the pension matter fails to pass the Legislature.

“One way or another, the people of this state, the people of this town, are in fact going to see a tax increase. … The people in this town need to believe there’s going to be a tax increase, and the question is how is it going to happen,” Hartwell said.

Conrad said the town needs to cut $3.8 million to $4 million to keep the mill rate flat. The finance board planned conservatively to ask for $3.5 million in cuts because it didn’t want to make more reductions than necessary, especially given the uncertainty of whether Westport will ultimately be responsible for the teacher retirement obligations.

“We don’t want to cut more and then have the teacher pension amount not be as much as anticipated and then, therefore, cut more than we really needed to cut,” board member Lee Caney said.

At a cost of $20,512 per student, many took issue with the Board of Education’s budget, which includes both debt and aid to private schools.

Board member James Westphal said, “I think there’s probably a million in there that’s pretty easily non-instructional, non-headcount reduction, completely invisible to any kind of changes.” He said he will take into account the difference between looking at a budget with a “business bias,” where one can cut discretionary bonuses, as opposed to a school budget.

Westphal said, “I’m very concerned about the long-term trend in the headcount at the Board of Education, where we’ve actually had a 3 1/2 percent decrease in enrollment over five years and a 4 percent increase in headcount, but I do think we need to take some time to restructure that and fix that.”

Don Bergmann said, “I think the school budget right now is too high.”

Numerous PTA leaders lauded the school board’s budget and cautioned against making cuts. Board of Education Chairman Michael Gordon said they were “proud” of the budget, but maintained that they “are team players” and are committed to finding any efficiencies they can, excluding anything that affects the schools programming.

Superintendent of Schools Colleen Palmer said, “We will do our best to meet fiscal goals; however, a fiscal goal that you outline may not come without degradation of the system. So, I think we have to find that sweet spot. At what point are you able to tolerate the quality of the education system being impacted while we try to save our resources.”

First Selectman Jim Marpe said the town will look to make up the $1 million shortfall by finding efficiencies across all departments. He said, “There may be some opportunities with regard to staffing” as far as using staff members across departments and through refraining from filling open positions.

The Board of Education will discuss its budget cuts at its Monday meeting. The Board of Finance will meet for three straight days starting Tuesday.

@chrismmarquette; cmarquette@bcnnew.com