Waterford — Facing the largest cut in state education funding in the region, school officials  are looking for ways to trim next year's school spending.

According to the most recent negotiated version of the state budget, which legislators are scheduled to vote on this week, Waterford would get just under $500,000 in Education Cost Sharing funds, which is almost $1 million less than the town received last year.

Surrounding towns face siginficanty smaller cuts to education funding — between $144,050 in East Lyme and $625,206 in Groton.

The proposed state funding cut, which is less devastating than an earlier state budget proposal that would have eliminated all ECS funding to Waterford, still prompted members of the Representative Town Meeting to drastically scale down the school budget at their final meeting last Thursday.

Superintendent Thomas W. Giard suggested more than $100,000 in cuts to the school budget at the meeting, based on projected savings on fuel and costs to LEARN, the regional nonprofit that operates the magnet Friendship School in town.

But those cuts didn't go far enough to offset the possible $1 million cut to ECS funding Waterford faces if the governor signs the budget as is.

RTM member Susan Driscoll, a Democrat, made a motion to cut the budget by an additional $350,000 that passed the RTM with a clear majority.

"We need to budget with what we know we have," Driscoll said as she suggested the cut, citing uncertainty about how much ECS funding the town will get at the end of the state budget process.

Giard said the district's administrative staff is spending this week identifying places that the school board could cut from the budget to accommodate the RTM's cuts.

Giard said he is aiming to avoid any layoffs, but that some positions may be eliminated through attrition or shuffling staff members around.

He said his staff has not yet finalized which parts of the budget could face cuts. He will present an amended budget to the school board for its approval in the coming weeks, he said.

John "Bill" Sheehan, a member of the Board of Finance and a former longtime member of the RTM, said the RTM's cuts to the school board are the largest the town's legislative body has made in decades.

"Based on the information they had, and not wanting to increase the mill rate any more than we had to, I think that was an appropriate reaction," he said.

He said he could see both sides of the budgeting struggles between the state and local levels.

"Nobody likes to see what they're used to getting cut," he said. "That's a safe statement."

The formula that state officials use to establish education funding for towns is based on each town's grand list.

Waterford has traditionally had a higher grand list because it hosts the Millstone Power Station, which in past years paid up to 80 percent of the town's property taxes.

As Millstone's impact on the town's tax base has withered as the facility's equipment depreciates with time, the town's reputation as a wealthy community is less accurate, Sheehan said.

"We do have one rather large taxpayer that pays a lot of our taxes," he said, but "Waterford's populace is not rich. The taxpayer in Waterford doesn't want to see their taxes go up more than the taxpayer in ... anyplace else."

But, he said, the state is looking for any excuse to cut, and a town with a higher-than-normal grand list like Waterford's is a good target.

"I don't know that they're being unfair when you look at all the taxpayers in Connecticut," he said. "We know why they're cutting it, it's because the state's financial condition is a disaster."

The cuts may slow down the school board's plans for growth in the district.

"It will mean that the board won't be able to do some things that they want," he said. "It will slow down their technology plan (for example) ... (but) I think they will weather the reduction."

Editor's note: This article corrects information from an earlier version.

m.shnahan@theday.com