New London - Businesses cannot afford an 8 percent tax increase.

That's the message City Center District is sending to the City Council.

"Our revenue base cannot support the government we have,'' member Frank McLaughlin said Thursday. "Eight percent will never fly. We'll do referendum after referendum if we have to."

City Center District, whose members own about 150 downtown businesses and buildings, voted earlier this week to support a petition for a budget referendum if the proposed tax increase for 2012-13 is not reduced. The group will not support any tax increase over 2 percent, McLaughlin said.

The City Council and the Board of Finance have tentatively approved an $83 million budget, which will require an 8.3 percent increase in taxes. The tax rate would go up about 2 mills, to 27.42 mills.

Municipal spending has gone down from the previous year, but the city is facing a tax increase because of a loss in revenues.

"It's not just us," Council President Michael Passero said Thursday. "Every city is dealing with this."

He called the City Center District vote "irresponsible."

"I think we developed a very honest budget,'' he said. "I don't think a 2 percent increase is realistic. Not if they (citizens) want fire, police and garbage pick-up.''

But on Thursday, Mayor Daryl Justin Finizio announced 25 layoffs in the fire department and 10 in the police department. The city has already laid off three public works employees and consolidated the Public Works and Utilities departments.

At least one member of the district agreed with Passero.

"I don't think it was a wise choice by City Center District,'' said Reid Burdick, a former city councilor. "Anyone has the right to petition, and I have no problem with that. I have no problem with City Center District saying they don't support an 8 percent increase.''

But, Burdick said, most members have never reviewed a municipal budget and are unaware of how cutting the budget will affect the city. He added that there are things the city can do to save money, such as energy conservation programs to curb gas and electric costs.

"I think 2 percent is arbitrary,'' said Burdick, who proposed supporting a 4.5 percent increase but got no support for it. "Everybody is going to get hurt. That's why, before you pick a number, I want you to tell me what you can live without."

At the same meeting he said, merchants talked about increasing garbage collection downtown, he said.

"They want more services, but they're not willing to pay for it,'' he said.

Member Bill Cornish, who also would not support more than a 2 percent increase in taxes, said the city should sell some of its assets before laying off workers or reducing services.

Last week, after a review of all the properties owned by the municipality, the mayor's office said the city does not have any property it can sell.

Speaking before the mayor made his Thursday evening announcement of public safety layoffs, McLaughlin said there are ways to save money other than by laying people off. He said the city should look at possibly regionalizing fire and police services. Municipal unions can also take cuts in pay, he said.

"I'm willing to pay more, but I want everyone to share in the pain,'' McLaughlin said.

The City Council is expected to vote on the budget on Monday. Because of requirements in the City Charter, the council has to vote in favor of the budget three times before it is adopted. But if five out of seven councilors vote in favor of the proposed spending plan, the mandatory three readings could be waived and the budget could be approved Monday night.

Finizio, who originally proposed a budget that had a 20 percent tax increase, said he will not reject the council's recommended budget.

After the budget is adopted, about 480 signatures, or 10 percent of the number of voters who cast ballots in the last municipal election, would be needed to force a referendum.

A city watchdog group called Looking Out for Taxpayers has not taken a stand on the proposed budget.

"LOT is waiting for the council to make its final decision,'' said member Evelyn Louziotis.

k.edgecomb@theday.com