MECHANIC FALLS – Voters at the annual town meeting on Tuesday will decide between budget packages prepared by the Town Council and the Budget Committee.

The council’s budget recommendation calls for an $86,550 increase over last year’s spending. It would translate into a tax increase of 0.9 mills over last year’s rate. The Budget Committee is recommending a budget that would result in an estimated 1.25-mill tax hike. The current mill rate is 26.2. The council’s total recommended expenditures are $1,515,828. Last year’s figure was $1,429,278.

The difference between the council’s budget and the higher proposal from the Budget Committee is the structure of the debt service for the $840,000 renovation project at the municipal building. Town Manager Dana Lee said $640,000 would be bonded. The Budget Committee proposes to pay more on the debt the first year and less over the life of the bond while the council wants the debt service spread out evenly.

“I’m very pleased that for eight years we’ve been able to hold the line on spending,” said Lee. However. He added that this year is different.

With little economic development and minimal business growth, Mechanic Falls has not enjoyed the tax benefits that other communities have.

“We’re getting a little bit of the residential growth and that might help spread out the pain a bit,” Lee said.

The town manager cited higher costs of property and casualty insurance and worker compensation premiums since the terrorist attacks in New York and Washington in September 2001. “Since 9/11, there has been a hardening of the (insurance) market,” he said. Municipal employees, especially police and fire departments, are considered higher risks by the insurance industry, according to Lee.

Also affecting the town, Lee said, are higher costs at the solid waste transfer station associated with water quality monitoring and required additional employees that have been monitored by the Maine Department of Environmental Protection.

The recommended budget for education calls for an increase of 4.31 percent, or $178,882. The total proposed school budget is $4,329,146.

“The bulk of the money we are going to raise is for secondary education,” said Union 29 Superintendent Robert Wall.

He cited two teaching positions at Elm Street School that were cut from the budget. Wall said the School Committee opted not to accept their stipends.

The school bus fleet is aging, Wall said. A decision was made by the School Committee not to replace one bus this year. The impact will be felt in one or two years. “We will be replacing more than one bus at the same time,” he said.

Wall said some services could be consolidated between the three towns in Union 29 – Mechanic Falls, Minot and Poland. Some services the towns could share include bus transportation and payroll.

“There are many ways things could be done regionally that could be explored,” Wall said.