In a vote that could have huge implications for future Westport budgets, voters on Tuesday rejected a ballot question asking if they approved of using excluded debt to fund Westport's portion of the Diman vocational school building project.

Residents voted 3,700 to 3,345 against excluded debt, with 516 voters leaving the question blank.

Despite the 'no' vote, Westport's financial obligation remains and could now have to come out of the operating budget over the life of the project's bonds.

In May, voters at Town Meeting passed a warrant article agreeing to pay Westport's share of the $293 million project. Westport's portion comes out to about $7.5 million, which would equate to a yearly tax increase of about $55 for the owner of a $500,000 home.

Once voters approved that spending, the only question, answered by voters Tuesday, was how to pay for it.

Without the ability to use excluded debt, which allows projects to be funded without impacting the state-mandated 2.5 percent yearly levy increase limit on the operating budget, Westport will now be required to fund the project through its razor-thin operating budget. The only other option, Westport Town Manager James Hartnett said Wednesday morning, is to go back to voters and ask again if they want to exclude the debt from the operating budget.

"I would have preferred" using excluded debt, Hartnett said. "These projects are usually funded with excluded debt."

Hartnett said he will discuss the vote and its ramifications at Monday's Select Board meeting.

If the question doesn't go back to voters and town officials need to find space for it under the operating budget, it will likely be a few years before the full financial impact hits.

Hartnett estimated that when the project begins and the bills start coming due, Westport will pay about $450,000 to $500,000 per year to fund its portion of the project. The bonds will run for 20 or 30 years.

Select Board chairwoman Shana Shufelt said Wednesday morning that she was not happy to see the question fail: