AUGUSTA — City councilors unanimously approved a $53.3 million city and school budget Thursday that will increase taxes 2.9 percent.

The budget incorporates several changes proposed since City Manager William Bridgeo’s initial budget submission, which would have raised taxes 6.1 percent.

It also assumes passage of an upcoming bond referendum to fund the expansion and renovation of the city’s Lithgow Public Library and refinance existing employee pension debt.

Councilors said lowering the tax increase to less than 3 percent was a remarkable accomplishment by the city and the school department, especially with state revenue sharing and funding for schools having been cut to below mandated, and previous, levels.

State revenue sharing, in the second year in a row of cuts, was reduced by $626,000 for Augusta, leaving property taxes to make up the difference, city councilors said before approving the budget. Councilors said the state also has shifted the responsibility for paying for teacher retirement costs, turned the responsibility for maintaining more miles of roads in Augusta over to the city, and continues to not meet its obligation to fund 55 percent of education costs.

“I think this budget is an amazing document, given we started out at an over 6 percent tax increase,” said Dale McCormick, at-large councilor. “That tax increase is largely because the state has shifted costs to the city of Augusta. Revenue sharing was a covenant, with cities and towns, the state has made and has broken. The state said ‘We will share with you 5 percent of the broad-based, most progressive taxes — income and sales taxes. We’ll share that with you and in return, you will not get to have local option (sales) taxes.’ They’ve broken that covenant and not given us any way to make up that cut. Therefore it falls to the property tax, the least progressive tax there is.”

The newly approved city and school budget adds a school resource police officer and half-time guidance and nursing positions at Hussey Elementary School.

The budget waives the $21,000 in rent charged to the Augusta Boys & Girls Club for Teens for space at Buker Community Center, while incorporating projected savings in several areas and higher-than-projected state aid for education. It also relies more heavily on reserve money to lessen the effect on taxpayers.

The budget is expected to result in a tax rate of $18.67 for every $1,000 of property value, up 52 cents, or 2.9 percent from last year.

However, those budget numbers work only if voters approve a proposed $15.6 million bond proposal at the June 10 referendum, because if the bond passes, it would save the city about $200,000 this year, savings which are built into the now-approved budget.

Of that total, $8 million would help fund the proposed, $11.7 million expansion and renovation of Lithgow, with private fundraising by the Friends of Lithgow expected to cover the rest.

Also, $7.6 million of the bond issue would refinance existing employee pension debt the city already owes.

It will cost the city more to pay off the pension debt over time, but the city will save money this year and for the next several years by having lower annual payments. The reduced annual payments on the pension debt would save the city about $56,000 and the school system about $146,000 a year, or a combined $202,000, compared to the current pension debt payments.

If voters don’t approve the bond proposal, the city would have to fill a $202,000 gap in the budget either by bumping the tax rate back up or tapping further into reserve funds.

Another major change to the budget since Bridgeo’s initial submission is an increase in revenue because of a $410,000 increase, over previous projections, in the amount of state funding for Augusta’s schools.

And the budget takes $250,000 more from the city’s fund balance account, up to $600,000, from the account generally made up of money unspent in previous years and reserved for emergencies.

Overall, the changes would require $773,000 less from taxpayers.

That’s despite the addition of some items to the budget, including $43,000 to hire a school resource officer who’d work for the Police Department but spend most of his or her time at Cony High School and other city schools.

Adding that position was a prime recommendation of a consultant’s study of the Police Department done in recent years and a desire expressed previously by Police Chief Robert Gregoire.

School Superintendent James Anastasio said Cony’s current security guards would be retained even if a school resource officer is hired, as they would perform different duties.

The budget also includes an additional $60,000 to create a half-time guidance position and half-time nurses position at Hussey, the only city elementary school without those positions, according to Anastasio.

And the budget removes $21,000 in revenue originally budgeted as rent payments from the Boys & Girls Club for its space at Buker. Bridgeo said the club has lost its affiliation with previous funder Spurwink Services and club officials asked the city to consider waiving its annual rent payment.

City officials said the club provides valuable services to about 200 teens, services the city thus doesn’t have to provide.

Ward 1 Councilor Michael Byron said funding those items for the benefit of youths will save long-term, through reduced societal costs, by helping the youths be more likely to grow up to become productive adults.

Several councilors noted state funding cuts to municipalities and schools have forced municipalities across the state to increase property taxes, which they argued is the tax that hits the people least able to pay, including the elderly and young families, the hardest. They suggested reforming taxes to increase reliance on income and sales taxes, especially sales taxes on items and services purchased by tourists and other visitors to the state.

Cecil Munson, at-large city councilor, said the city has cut all but the core services people rely on, and if people feel the city is not spending or budgeting wisely, they should call councilors to talk about that, and come view the audit reports which analyze the city’s finances.

Keith Edwards — 621-5647 | kedwards@centralmaine.com | Twitter: @kedwardskj