NEW GLOUCESTER — Town employees will get merit pay raises of up to 2 percent for 2011-12, according to a preliminary spending plan reviewed Thursday by the Budget Committee.

The merit raises are in lieu of the percentage pay increases of past years. No staff cuts, no new hiring and no reduction in hours are planned, according to the proposal.

Members gave preliminary approval to at least 11 accounts Thursday, but left health insurance and others until they get more information. Accounts initialed include: selectmen, $16,150; administration, $289,080; assessing, $35,450; code enforcement, $60,366; elections, $4,350; legal, $18,000.

Also, emergency management, $2,500; benefits, including Social Security, unemployment compensation and retirement, $78,500; debt service, $364,000; overlay, $5,000; and tax abatements, $15,000.

The committee tabled health insurance to research possible savings. This year’s request rose from $195,000 to $236,000.

Town Manager Sumner Field III told the group that oil costs are expected to rise between $20,000 and $30,000 annually.

Steve Libby, chairman of the Board of Selectmen, said the board deliberated on the budget Wednesday, but is not comfortable with the current figures.

“In all fairness, the committee needs that information, but it’s difficult to do a budget when you don’t know what the acceptable bottom line is,” Libby said.

“As the state continues to pressure municipalities with reductions in revenue sharing, business equipment tax exemption (BETE), homestead exemptions and responsibilities for maintenance or roads formally designated as state roads, New Gloucester will need to do more with less or find a way to increase revenues, most likely through taxation,” Field said.

Selectman Nat Berry III said the 11-member committee serves as a “second set of eyes to look at the budget. This is not a rubber stamp committee.”

The 11-member panel unanimously elected Peter J. Turner as chairman and Amy Arata as vice chairman.

The Budget Committee reviews will take about four meetings before a public hearing is scheduled. Selectmen will finalize the budget and hold another public hearing before sending it to voters May 2.

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