Groton - The tax rate in Groton will drop from 20.72 mills to 20.13 mills starting July 1, the Town Council voted Tuesday.

Councilors decided to use $900,000 of reserve - originally planned to soften the blow of losses from the demolition of Pfizer's former research headquarters on Eastern Point Road - to instead lower the tax rate in the coming fiscal year.

"I believe that this is a very important step that the council is taking because this is not our money, this is the citizens of Groton's money," Councilor Heather Somers said.

The $900,000, combined with earlier plans to use more than $2.3 million in reserve to offset taxes, would result in the 20.13 mill rate, a reduction of 2.8 percent.

The new rate is equal to about $2,013 in local property taxes for every $100,000 of assessed value.

The Representative Town Meeting recently approved a budget of $122.78 million for the coming fiscal year, a $2.8 million increase over current spending.

But the town was able to cover that total and still cut taxes because it received more revenue and spent less than expected in the current fiscal year.

Councilor Genevieve Cerf said the town must prepare for years when it doesn't have as large a reserve, and get creative about spending cuts. "I really think it's important to start biting the bullet now," she said.

The budget plan will still set aside $1.8 million for the 2015-16 fiscal year to offset Pfizer losses.

Then the council will use $900,000 for Pfizer in the 2016-17 fiscal year and spend the other $900,000 in the coming year for tax relief.

- Deborah Straszheim