MILFORD – Tonight Milford residents will head back to the polls to decide if surplus funds should be used to reduce the town’s mill rate by about $2 per $1,000 of valuation.

A special town meeting is scheduled for 7 p.m. at the Lewis S. Libby School.

Last year’s tax rate was 18.7 mills.

After residents approved the town’s budget at the annual town meeting in June, officials had to figure out exactly what the rate would be. The projected mill rate for fiscal year 2003-04 is between 22.1 and 23.2 mills.

Two weeks ago at the last regular council meeting, town officials decided to ask voters to approve taking the money from the undesignated funds balance to help reduce the mill rate to around 20 mills.

Residents already approved allocating $215,000 from the fund at town meeting. The additional $200,000 would mean $415,000 would be used from the undesignated funds balance to reduce taxes this year.

“What happened was we didn’t get the same amount of grant money for the school as we did last year,” said Milford Town Council Chairman Francis Richard. “We didn’t get that much grant money so consequently we’re taking $200,000 out of the undesignated funds to keep the tax rate down where we want it.”

Town Manager Vance Merritt said this is the second year in a row the fund has been used to reduce taxes. He said Milford needs to find other sources of revenue if the town is to continue to keep the tax rate low.

About $800,000 is left in the undesignated funds account.

“If we have a lot in undesignated funds, we usually take some out to lower taxes,” said Richard.

The town’s budget is $1.6 million and the school’s budget is $4.7 million, for a total budget of $6.3 million.