LISBON – Facing a $73,000 overdraft in the winter roads budget, a half-million dollar cut in school subsidy from the state, and a shortage of undesignated funds to make up the difference, the Town Council is determined not to increase the tax rate.

With this in mind, Town Manager Steve Eldridge has issued a directive to all department heads to cut their budgets by 5 percent for the 2008-09 fiscal year.

Eldridge told councilors Tuesday night that department heads are now “working diligently” on their budgets to make the cuts. In addition, he said, the town will be cutting capital programs this year.

In other business, councilors reviewed a draft proposal of changes to the sign ordinance, which includes more controls and restrictions. It must also go before the Planning Board.

Councilors took the following actions on Tuesday:

• approved expansion of the village zone in Lisbon Center beginning at the Sabattus River Bridge, which will allow smaller businesses to expand and granted an off-premise catering permit for Graziano’s Casa Mia;

• hired Jody Durisko as the town manager’s administrive assistant. She formerly worked part time in the town clerk’s office; and

• appointed John Collins to the Budget Advisory Board.

representing District 1.