DIXFIELD – This year’s municipal budget could go well over the increase allowed under the state’s tax cap law, and that’s taking into consideration necessary increases in only a few accounts.

Town Manager Tom Richmond said selectmen worked another two-and-a-half hours Monday night on the budget, and plan to work several more Mondays, along with the Finance Committee, to get it complete by the end of March.

“With a $1 a gallon increase in heating oil, diesel fuel and gasoline, that will cost thousands of dollars more,” Richmond said.

Under the tax cap, the town is allowed to raise an additional $15,000 over last year’s budget, Richmond said.

During the budget development process, everything’s up for consideration, he said, although he would not say whether any positions would be eliminated.

This year’s town budget is $1,996,000, with a tax rate of $29.50 per $1,000 of property valuation.

He said fuel for the highways, for both summer and winter roads, has increased by $4,000 each. Cost for Med-Care Ambulance Service’s proposed new building would be another $20,000 a year. Hydrant fee rentals are expected to rise from $92,000 to $125,000. Salary increases and other increases are not yet figured in, he said.

In other matters Monday, the board agreed to delay dedicating the annual report until March 24. Residents are asked to provide suggestions for the dedication as well as for distinguished citizen of the year. Both names should be submitted to the town office by March 24. The board will choose a candidate for each at that night’s meeting.

Also on Monday, Richmond said the board is working with the U.S. Postal Service to try to renegotiate the lease the post office has with the town for rental of a portion of the town office building.

He said the two furnaces that heat the building cost $10,000 each and that the town is trying to recoup some of its costs.

Right now, the post office pays $15,500 a year to rent its space. The lease expires in 2011, but the town is trying to open the contract early.