HALLOWELL — The city’s new $2.4-million municipal budget will necessitate a 3 percent property tax increase.

The Hallowell City Council passed the final version of its budget June 9, said City Manager Michael Starn. The budget, which takes effect for the fiscal year starting July 1, is 9 percent higher on the spending side than last year.

It budgets $270,000 for capital improvements across the city, including paving, culvert and repair projects.

Hallowell property taxes will rise from $17.10 to $17.60 per $1,000 in property value, resulting in a $100 tax increase on a $200,000 home.

That’s partially due to increased spending, but also to a Regional School Unit 2 budget approved earlier this month that calls for $190,000 more from Hallowell over last year.

The city budget benefited from a $136,000 surplus, more than Hallowell officials expected, Starn said. That tamped down the tax increase, while the city held the line on spending in most areas.

However, it made investments in capital improvements, spending $138,000 more than last year on infrastructure projects.

That includes a $100,000 paving and culvert project on outer Central Street, $70,000 for paving work on Summer Street and $40,000 for City Hall renovations, plus other projects.

When Starn initially proposed his budget, it would have mandated a 10 percent tax increase. In May, a revised version called for a 4 percent increase.

Councilor Mark Sullivan, chairman of the city’s budget committee, said the committee recently gave Starn a goal to limit the hike to 3 percent, saying “in the final stages, we were able to shift some things around so we could get it down to that level.”

“I think the Finance Committee did a good job paring where they could pare and getting it down to a modest increase,” said Mayor Mark Walker.

Michael Shepherd — 370-7652

mshepherd@centralmaine.com

Twitter: @mikeshepherdme