MECHANIC FALLS – Despite an increase in municipal spending, property taxes will drop following voter approval at Saturday’s town meeting of a $6.5 million budget.

For a home valued at $100,000, taxes will be falling about $100. Last year’s tax rate was 18.6 mills, this year’s mill rate will be about 17.6.

“This is the first year I’ve seen property tax relief. There’s been talk of it for eight, nine, 10 years, but it’s real this year,” said Carlton Beckett, chairman of the Budget Committee.

Mechanic Falls was able to cut taxes without cutting programs because it received more money for education from the state, about $234,000 more than last year. The state has warned that money for education will decline in coming years as the state reaches its goal of providing 55 percent of the cost for K-12 education.

Beckett commended the School Committee, Town Council and their staffs for developing responsible budgets.

The 50 residents who attended the town meeting showed their appreciation by approving the school and municipal budgets, totaling about $6.5 million, without any changes.

On the town side of the budget, police and public works spending increased, with voters approving $270,000 for police, up $14,000; and $378,000 for public works, up $23,000. The approved town office budget is also up $23,000 to about $405,000. Of that, $15,000 is for utilities.

Approved spending for the Fire Department, rescue and dispatch all decreased slightly with reductions totaling about $9,000. Greater savings, totaling $33,500, came from spending approved for community and fiscal services.

Voters also approved a request to set aside $205,000 for capital improvement reserves, with $84,000 earmarked for public works equipment and $35,000 to replace the roof of the building housing the Fire Department and public works.

Overall spending is up about $44,000 from last year, but the increase is less than allowed by the legislative tax cap law. Under that cap, spending could not grow more than $76,000.

Town Manager John Hawley cautioned voters that his budget was prepared before the recent surge in fuel prices. If energy costs continue to climb, a special town meeting may have to be called, Hawley said.

In the school-spending side of the budget, voters approved a $4.7 million budget in less than 35 minutes.

Elm Street School Principal Mary Martin said the school budget was strictly “hold the line” and had no new programs.

Union 29 School Superintendent Nina Schlikin said that the per pupil cost at Elm Street School is about $7,200, less than the state K-8 average of $8,200.

“They do a stupendous job at Elm Street,” she said. When it comes to MEA scores, Elm Street is at or above state averages in 16 of 18 areas. That’s “the best in Union 29,” Schlikin said.

After the budget votes, town meeting moderator Robert Small recognized Councilman Bill Diehl, who is stepping down after nearly 30 years of service. Voters gave Diehl a standing ovation.