MEXICO – Selectmen eliminated their salaries indefinitely Monday night, implemented a hiring freeze and stopped an order for new police cruisers as they began dealing with a budget deficit of more than $100,000.

And more cuts will likely be voted on at next week’s board meeting.

“We’ve got to look at what can be cut now,” said town clerk and treasurer Penny Duguay.

The town has found itself with a deficit, estimated between $131,000 to a high of nearly a half-million dollars.

“We owe ourselves,” said board Chairman Arthur Bordeau.

A recent audit report showed that the town has no carryover and an estimated debt of $131,000. Also, the town has borrowed $197,000 from its reserve accounts, and $200,000 from a tax anticipation note to aid in its cash flow.

Duguay said tax payments coming into the town can cover the money borrowed from the reserve accounts and the tax anticipation account. However, she added, the town would run out of money again before the end of the fiscal year, which is June 30.

“Mexico for a while will have to provide just essential services,” said Selectman Monique Aniel.

Also up for possible reduction are the full-time positions held by the librarian, recreation director and municipal buildings’ custodian.

Those three positions were part-time, without benefits, until several years ago when they were increased to 32 hours a week, an action that triggered health insurance and other benefits.

When the board meets on Nov. 10, it will also look into reducing cell phone use, decreasing the number of street lights, and reducing or eliminating myriad other nonessential services. They may also look at reducing other municipal positions.

In the meantime, Bordeau was directed to check with the Maine Municipal Association to learn whether borrowing from the reserve accounts was legal, and if so, whether there is a specified amount of time the town has to repay the funds.

“We’ve got to look at saving about $400,000 in the next couple of years. We can’t nickel and dime it,” said Betty Barrett, a former selectman who now sits on the SAD 43 board.

Duguay said the deficits have been coming for several years.