MEXICO — Selectmen and Budget Committee members hammered out a proposed 2011-12 municipal budget Thursday night, settling on a nearly 9 percent increase over current spending.

The budget came in at $2.8 million. This fiscal year’s is $2.6 million. 

Almost the entire increase is because of a large bond payment due this year on the town’s road project.

A major reduction was made to the Recreation Department budget. Its director’s hours will be reduced from full time to 20.

Town Manager John Madigan said he wasn’t sure of the impact such a major cut will make on the town’s recreation programs.

Several social service agencies are going unfunded by the town, and several others received less support than usual. Economic development funding was also reduced. The position of road commissioner was eliminated, and the cost per person for membership in Med-Care Ambulance Service increased to $18 from $16.

None of the town’s employees will receive wage increases under the proposal, while health insurance went up by just over 9 percent.

The town’s share of solid waste disposal declined by about $4,500.

Voters will decide on the final budget June 14. Before then, a public hearing will be held.

The budget will be broken into 12 articles on the warrant, along with two or three other referendum questions dealing with providing fire coverage for the town of Byron.

Despite the proposed 9 percent increase in the municipal budget, Madigan said the tax rate will rise less than $1 because of a refund the town received from the Maine Retirement System. He said that windfall of $705,000 will likely be spread over five years of bond payments so taxpayers aren’t hit with high taxes.

The current tax rate is $21.50 per $1,000 valuation.

The proposed budget does not include the school and county assessments.

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