MEXICO — Emotions ran high as Mexico residents voted to allocate money from the surplus fund for three articles Tuesday night.

Voters agreed to use $100,000 to reduce the 2011 and 2012 tax commitments. Selectman Byron Ouellette said he opposed using the surplus for that purpose.

“We aren’t getting state and federal money like we used to, and with the economy the way it is, I hate to see our nest egg dwindle away,” Ouellette said.

His statement caused a stir of discussion on how the town must consider making cuts in the budget to survive. Many townspeople were concerned about future tax rates and how well the town was managing staff and road repairs.

Town Manager John Madigan said he would not have made the recommendations to use the surplus unless he knew he had enough to keep adequate cash flow in the surplus fund.

Voters also approved allocating $5,000 to fund the dangerous and dilapidated building account. Only $2.12 remained in the account from the previous year when the town used it to tear down two buildings. Madigan said no buildings were under scrutiny, but the town would soon be dealing with tax-acquired properties that might have to be demolished.

The last article was to approve the use of $140,000 from the surplus fund to pay down principal on money the town borrowed for road improvements. Reduction in interest on the borrowed funds would reduce the town’s tax rate by $2 per $1,000 of assessed value. The motion passed by an 11-4 vote.

After the articles were approved, selectmen voted to set the town’s tax rate for the 2011-12 tax season to $23 per $1,000 of assessed value.