LINCOLN – The Town Council on Monday approved a municipal budget of $2.8 million.

Town Manager Glenn Aho estimated the new tax rate will increase by 53 cents, from $18.65 per $1,000 of assessed property value to $19.18. A taxpayer with a home valued at $60,000 will pay $31.80 more than last year if no improvements were made to the property.

Although municipal spending went down, town officials said the tax rate will go up because of an increase in the SAD 67 assessment.

The total municipal budget of $2,810,871 represents a decrease of $243,324 or 8 percent compared with last year. The amount to be raised from local taxes is $1,175,866, a decrease of $136,429 or 10.4 percent compared with last year.

The council approved the budget after a public hearing. The council heard mixed views on whether the town should use an extra $140,000 from trust fund earnings to offset the school budget increase in order to keep the tax rate the same as last year.

Some residents who support the town using the extra trust fund money said all taxpayers including Eastern Paper’s Lincoln mill needed a break in light of rising electric, fuel, water and sewer costs. They said the earnings from the fund could be used only to offset school costs and that the fund still would grow.

But other residents who opposed using the extra trust fund money said the town would only be bailing out the schools and would be sending a wrong message by using extra trust fund money to reduce the tax rate. Doug Pinkham, a resident, said the trust fund could decrease.

Earlier, the council decided it would not use the extra trust fund money.

Several residents commended the council for its efforts to keep municipal spending down. Councilors said they could not take all the credit for the municipal budget. Officials credited the town’s department heads and employees for their efforts.