MEXICO – Selectmen on Wednesday set the property tax rate at $23.35 per $1,000 valuation, down 6 percent from the fiscal 2008 rate.

The decision followed a 75-minute special town meeting to decide how much money should be taken from surplus to offset taxes.

Although the rate is lower now than it was, that doesn’t mean property owners’ tax bills will be less, because the board voted a 20 percent across-the-board increase in property values at a previous selectmen’s meeting. That action was taken to bring property values in line with the state valuation.

Setting the tax rate followed a volatile discussion by some of the nearly 20 voters who turned out. Some argued to take $100,000 from surplus; the Budget Committee chairman said none should be taken. Other amendments to the proposed $50,000 from surplus included $75,000 and $99,000.

Voters finally approved taking $70,000 from surplus, a number that includes the original $50,000 proposal by Town Manager John Madigan, and the equivalent of what the town would have spent to support Med-Care Ambulance Service prior to that agency’s decision not to raise rates.

Betty Barrett said this was not the year to raise taxes because of the high costs of fuel, food and medicine and motioned to take $100,000 from surplus.

“We’ve got people hurting bad,” she said. “We need to help out people on fixed incomes. Another $50,000 is not going to break the bank.”

Madigan said taking such a high amount of money from surplus was one of the reasons the town got into financial trouble several years ago when the town used surplus money for several straight years to offset taxes. Those actions resulted in a deficit.

“If you use $100,000 this year, you won’t have any for next year,” he said.

During Madigan’s three-year tenure as town manager, the surplus has increased to just over a half-million dollars, which is what the state recommends for a town the size of Mexico.

Byron Ouellette, chairman of the Budget Committee, along with several others said taking money from surplus didn’t get at the root of the problem.

“The big problem is we’re spending too much money. $50,000 (from surplus) is just a quick fix,” he said.

During the town meeting, Madigan said the $50,000 from surplus would save property owners with homes valued at $100,000 about $50 in their taxes. The $70,000 figure will save them a bit more.

“This is the lowest tax rate in the past 25 years,” Madigan said of the $23.35 figure.

Ouellette said he is calling a meeting of the Budget Committee in the next week or so to get an early start on developing next year’s municipal spending proposal.

Tax bills will go out soon. The first half is due in October. The second in April.