RUMFORD – A commission of selectmen, town managers and residents from Rumford and Mexico may soon begin a study of whether regionalizing public services could save both towns money. And if Dixfield is interested, it, too, is invited to join the commission.

The unanimous action by Rumford selectmen was taken at the Thursday night selectmen’s meeting after a presentation by Town Manager Jim Doar, who warned the board that about $200,000 must be cut for the 2008-09 municipal budget to adhere to the state’s tax cap.

“If it is not feasible (to lower public service costs), then the commission would dissolve itself,” said Selectman Frank DiConzo, who made the motion to form a group.

As proposed, the managers of the two towns, a selectman from each, and a resident from each would meet, beginning in early February. Dixfield will be contacted to learn whether it wants to join with Rumford and Mexico.

“This would be an additional step to help us in the future with taxes,” said DiConzo of his motion.

Selectmen and some residents were also prompted to support the formation of a commission because of the announcement this week that NewPage Corp. plans to shut down one of its paper machines and eliminate about 60 jobs.

“You need to be mindful of what happened in Rumford yesterday. Cuts are unpleasant,” resident Rob Cameron said.

Doar had said earlier in the meeting that the town had been holding the line on its municipal budget each year for more than a decade, averaging an annual spending growth of under 1 percent.

“We can’t hold the line forever,” Doar said.

He said increased costs such as debt service for the renovation and construction project at the municipal building, higher Med-Care Ambulance Service costs, increased salaries and higher water rates add up to $320,000. The state tax cap linked to the growth of the town allows for a $125,000 increase over last year’s roughly $7 million municipal budget.

“We must override the tax cap or cut services,” he said.

Residents have never voted to override the tax cap, and Selectman Mark Belanger said he would not support going over the increase the state has set.

Doar asked the board to set priorities for those things that must be saved and those that could be cut.

According to the town’s charter, Doar has two months to submit a budget.

“We need to set spending priorities,” he said.

Those decisions are expected to be made at the board’s next meeting Feb. 7.

By that time, the new Regionalization Commission should have met or be about to meet to work on the feasibility of cutting public service costs.