EAST MILLINOCKET – Residents approved town and school budgets totaling $7.1 million during Tuesday’s town meeting.

The $7,156,861 represents an increase of $434,089, or 6.45 percent, compared with last year’s $6,722,772.

The total amount to be raised from local taxes is $5,228,562, an increase of $129,962, or 2.54 percent compared with last year’s $5,098,600.

Administrative Assistant Mary Morris estimates the tax rate could increase by 48 to 68 cents, from $18.69 per $1,000 of assessed property value to between $19.17 and $19.37.

A resident with a $60,000 home will see his or her tax bill rise between $28.80 and $40.80. The estimates are based on the current value of the town and could change when a new value is determined.

The approved municipal budget is $3,238,632. It represents an increase of $281,209, or 9.5 percent, compared with last year. The amount to be raised from local taxes is $2,502,001, an increase of $35,509, or 1.43 percent, compared with last year. The single largest budget item is $550,000 for costs associated with the ongoing tax dispute between Great Northern Paper Inc. and the town.

During the meeting, Dan Birt, a resident, asked what was happening in the case, on which the town has spent more than $1 million. Morris said the case was before the State Board of Property Tax Review and should be decided in June.

The municipal budget includes no new positions and no major capital projects. It includes funds for 3 percent pay increases for employees.

Residents approved a school budget of $3,918,229. It represents an increase of $152,880, or 4 percent compared with last year. The amount to be raised from local taxes is $2,726,561, an increase of $94,453 compared with last year.

The budget includes money to create a full-time technology coordinator position and to raise two part-time positions to full-time. It also includes money for three kindergarten teacher aide positions, which previously were funded through a grant. One fourth-grade teaching position will be eliminated because of a drop in enrollment. It includes funds for salary increases averaging 3 percent.

After some discussion, residents also approved renewing a five-year high school tuition contract with the neighboring town of Medway.

Shorey Ewing, a resident, asked why the town was considering a five-year agreement at a time when the tax abatement issue was hanging over the town and officials were studying area school consolidation. She suggested the agreement run from year to year.

Dave Rush, chairman of the school budget panel, said the agreement is just a renewal of the same contract the board has been under for many years.

For more than 40 years, Medway’s high school students have attended Schenck High School in East Millinocket. The current five-year tuition contract expires June 30. The new contract runs from July 1, 2002, through June 30, 2007. The contract includes a provision where both boards can request an amendment or modification of the contract with a written request.