Preston - The Board of Finance approved a proposed $10.6 million school budget and $3.3 million town budget Thursday, making no cut to the proposed school budget and some adjustments to the town budget to be presented to residents at a town meeting next Thursday.

The votes followed a two-hour public hearing dominated by discussion and support for the requested $10.6 million school budget, a 1.86 percent, $193,644 increase over this year's budget. About 40 people attended the hearing.

Board member Norman Gauthier cast the lone dissenting vote on the school budget, calling it "way too high." The board voted unanimously to approve the town budget after several changes.

Because the town conducted a property revaluation this year, the combined proposed budgets of $15 million, including debt services and capital expenditures, would appear to have a significant tax increase, from the current 19.43 mills to 24.21 mills.

The finance board voted to use $500,000 from the town's general surplus fund to offset tax increases.

Board of Finance Chairman Jerry Grabarek said under the old values, the increase would be about 1 mill. Car taxes, however, would rise significantly with the proposed new tax rate, because those values did not drop as real estate values did in the revaluation.

At the start of the public hearing, Superintendent John Welch reviewed the proposed school budget, saying the 1.86 percent increase would be the first after five years of flat-funded budgets at $10.4 million. He called the request "reasonable."

Welch said the school budget includes two new staff members to the school bus garage.

Asked if the school board was forced to cut the proposed budget, Welch said if personnel had to be cut, it would come from the enrichment programs, such as art and music.

But Welch added that he would first consider separating the school system from the town government in purchasing health insurance.

That move would save the school system $138,000 but would raise insurance costs for the town, he said.

"I'm all for staying with the town, but I'm not for cutting programs that affect kids," Welch said.

Resident Vincent Eleazer, who has children in kindergarten and fourth grade, said he understood the high cost of education and pointed out that the school board anticipates returning to the town $248,000 in surplus by the end of this year. He said that gives him confidence in school leaders that they would spend the new budget properly and turn over excess to the town.

"They are not fluffing that number," Eleazer said. "There is no slush fund in that budget."

c.bessette@theday.com