New London - Across the city Tuesday, residents and business owners were trying to digest a proposal by the mayor to increase the budget by about 6.4 percent and raise taxes about 20 percent.

"I didn't quite make it to the Gold Star Bridge,'' said William Cornish, who owns seven properties in the city and pays about $84,000 a year in real estate taxes. But Cornish, owner of Copperwood Grille and several downtown buildings, said the proposed $87 million budget is unrealistic. He could end up paying another $16,000 in taxes.

"Everyone's on the edge. No one's talking about anything else,'' Cornish said. "I think people are shocked."

Monday night Mayor Daryl Justin Finizio gave his first "State of the City" address and proposed a budget that included $46 million for general government, a 9.7 percent increase; and $41 million for the schools, a 3 percent increase. The Board of Education had requested a $42.9 million.

Finizio's proposal would result in a 5-mill tax increase. If it is approved, the owner of a home assessed at $200,000 would face an increase of $1,000 in annual property taxes.

The budgets for nearly all departments were increased in the proposal, but Finizio said "constant dipping into our fund balance, knowingly underfunding easily predictable line items and years of refusals to raise taxes'' are some of the reasons for the increases.

The city has not had a tax increase since 2009.

Cornish, who supports the mayor and was in favor of the elected mayor form of government, said he expected some tax increase, but said he wished the mayor had proposed a plan and not tried to do it all in one year.

"We can't just keep going into debt,'' he said. "We just can't afford it.''

He suggested the city look into selling off some of its holdings - such as the Water Street Parking Garage, Harbor School and an office building on Masonic Street.

In his budget address, Finizio said Chief Administrative Officer Jane Glover is looking into the potential sale of city assets. The city also has refinanced its debt service to take advantage of lower interest rates and reduced payments.

Finizio told the council that if it is looking for places to cut, he would suggest trimming $2.5 million from the fire department by eliminating one of three firehouses in the city, and opening up talks with the union to discuss minimum staffing levels and pension reform.

Rocco Basilica, president of the firefighters union, said Tuesday he was surprised by the proposed budget and Finizio's recommendations to cut funding for the 76-member department. He said he would sit and talk with city officials when they call a meeting.

"Honestly, I'm not going to negotiate in the paper,'' he said, adding, "Obviously our goal is to mitigate emergencies as soon as possible. When the bell hits, we're going to take care of the citizens of New London."

Others who live in the city, not just property owners, also were surprised by the proposed budget.

"I don't think voters are going to go for it,'' said Barbara Brasky of New London, as she shopped in the Family Dollar Store on Ocean Avenue.

"Five percent is too much,'' Michele Messenger said. "It will get passed on to renters.''

Sonia Cruz, who rents in Waterford, said the proposed tax increase will make it more difficult for her to move back to New London, where she grew up.

"I've lived all my life New London,'' she said, adding that she wants to move back. "But everything is going up, up, up."

A worker in Family Dollar, who asked that her name not be used, said there's no incentive for anyone to move to New London.

"I know they're trying to bring in commerce, with the ships and everything, but they're making it unmanageable for anyone to live here," she said. "It doesn't make for an easy lifestyle for anyone."

A couple of miles away at Ocean Beach Park, a young family that owns a two-family house on West Pleasant Street was enjoying the sunny day. They said they can't afford a tax increase.

"It's unfortunate to pay that much where I live,'' said the woman, who did not want her name used. "It's just not fair.''

She has two young children who are not yet of school age, and she pays about $3,500 in taxes. With Finizio's proposal, she would have to pay about $700 more. Maybe others in the city who do not have children can afford the increase, she said, but it's not fair.

"There's a gray cloud hanging over New London every day,'' said John Hamilton, a city resident and a union construction worker. He was referring to recent problems, including allegations of racism in the fire department and racial profiling and possible corruption in the police department.

"There's nothing wrong with raising taxes,'' he said, but he wants to know where the money is going and who will benefit.

The City Council received the proposed budget Monday and has scheduled meetings for April 9, 12, 16 and 17. Several councilors said Monday they intend to pare down the budget.

The council has until May 1 to review the budget with department heads and prepare for the Board of Finance two appropriating ordinances - one for general government and one for education.

The finance board will hold public hearings and return the budget to the council with its recommendations. The council then has to approve the appropriating ordinances by May 31. The mayor will have 15 days to act. If he does nothing, the budget is approved. But the mayor has the power to veto the ordinances in their entirety or to veto individual line items. If he vetoes the ordinances, the budget will go back to the council for a vote to override the veto. Six out of seven votes on the council are needed to override the veto. The new budget takes effect July 1.

Residents also can petition for a referendum.

k.edgecomb@theday.com