MILLINOCKET – Town property tax bills will increase to $24.20 per $1,000 of assessed property as town officials offset expected school cost increases and add to the town’s fund balance.

Michael Noble, the town’s tax assessor, said the new mill rate represents an increase of about 2.5 mills from the current rate, 21.7 mills, or $21.70 per $1,000 of assessed property.

“This year’s bills will go out [to taxpayers] as soon as I can get them out,” Noble said Thursday.

With Councilors Bruce McLean and Matthew Polstein absent, the council voted 5-0 Thursday to set tax bill due dates of Nov. 21 and April 17 for both halves of fiscal year 2008-09. The budget year ends June 30.

The mill rate increase, Town Manager Eugene Conlogue said, is due to a large increase in local school spending, about $567,000, as part of the school system’s 2008-09 budget.

An additional $100,000 in taxes will be raised to allow the town to spend $500,000 of its $1.8 million undesignated fund balance this year instead of the $600,000 used from that fund last year. Another $100,000 will cover wage, benefit and fuel cost increases, Conlogue said.

Given the uncertainty of the national economy, tougher times might lie ahead, Conlogue warned.

“We know today we have a [town paper mill] that is flat. We know that the company [that owns the mill, Brookfield Asset Management] is working on a solution to get it back up again,” Conlogue said.

But if the Katahdin Paper Co. LLC mill fails to restart in 2009 and the 208 workers who are expected to be laid off are not rehired, the town will face dire consequences, Conlogue said.

To minimize the town’s credit debt and pay some new bills, he proposed several budget amendments that the council accepted with a 3-2 vote.

They included eliminating about $138,000 in street and sidewalk paving work, leaving only $4,500 remaining, and fronting $138,908 for a new plow truck instead of spreading the cost over two years.

Another $30,000, or $10,000 each, will cover a library exit remodeling, safety fixes to town buildings and the creation of a town warming center, if the council opts to approve the center.

Councilor Scott Gonya argued against cutting the paving budget so severely. The council has spent years developing its paving program, he said, and cutting it for a year would be a major setback. Also, paving costs will decrease markedly if oil costs continue to decline, he said.