Norwich — The proposed $126.8 million combined city and school budget unveiled by City Manager John Salomone crosses a tax levy threshold for central city taxpayers that immediately didn’t sit well with Mayor Peter Nystrom and several members of the City Council on Tuesday.

Salomone on Monday presented a proposed $46.69 million general government budget, a $77.7 million proposed school budget and a central city fire department budget totaling $7.98 million to the City Council. The council is meeting with various department heads over the next two weeks before conducting the first public hearing on the budget at 7:30 p.m. April 12.

If the budgets were approved without changes, central city property owners would see a tax rate of 52.08 mills, up from the current 48.74 mills this year, a 3.34-mill, or 6.85 percent, increase. Property owners in the five volunteer fire districts would have a combined tax rate of 42.53 mills, up from the current rate of 40.67 mills this year, a 1.86-mill, or 4.57 percent, increase.

Nystrom said a tax rate of over 50 mills in the downtown area is a “benchmark we shouldn’t cross.” Other aldermen also balked at the 50-plus tax rate for the central city and said it could negate economic development progress made in recent years downtown. Several vacant buildings are undergoing renovations, some already reoccupied.

In addition to open meetings with various city department heads and school officials, the four council Republicans and three Democrats are expected to hold closed-door party caucuses in the coming weeks to discuss the budget and perhaps reach party agreements on specific spending items.

The Board of Education requested an $83 million budget that would require a $6.8 million, or 9 percent, spending increase over this year. Salomone’s proposal calls for a $77.7 million total, a 2 percent spending increase.

Salomone said Tuesday he proposed a school budget increase he felt was affordable for city taxpayers. “It will be up to the City Council to decide what to fund them,” Salomone said. The City Council controls only the bottom line of the school budget, but has line item control over city government expenses.

Even if the council did have the votes, the city doesn’t have the money for a 9 percent school budget increase "without dramatically raising taxes," freshman Democratic Alderman Samuel Browning said.

Republican Alderwoman Stacy Gould, the council’s liaison to the school board, said she hopes the council can come up with a “middle ground” school budget total.

The city government budget calls eliminating only one position, a code enforcement secretary in the building department. Salomone proposed eliminating the position last year, but the City Council restored it.

The city side also includes a $100,000 proposal to revive the Sachem Fund, a joint fund created in 2007 by the city and the Mohegan Tribe. Neither party has funded it since 2013.

Nystrom proposed reviving the Sachem Fund and said it could be a catalyst for economic development. City officials have not discussed the plan to revive the fund with tribal leaders, Salomone said.

Nystrom said one project could be to restore the dilapidated staircase that once connected the Uncas Leap area to the Mohegans’ memorial park at the tribe's historic burial ground at the corner of Sachem and Washington streets. Frequent walking tours are held at both sites.

Republican Alderman William Nash, past chairman of the Sachem Fund Board, said he would like to see the fund restored. Nash was confident tribal leaders would support contributing to the fund.

Other aldermen were not so sure about it.

Alderwoman Joanne Philbrick, also a member of the Sachem Fund Board, said she understands the reason for reviving the fund, but added, “It’s going to be a very difficult budget season.”

Browning said he “politely disagrees” with refunding the program. He said the city could work directly with the Mohegan tribe on jointly funding specific improvements to the historic Uncas Leap area. He called the Sachem Fund “nice to have other than need to have.”

Cathy Soper, manager of tribal communications for the Mohegan tribe, said tribal officials would not comment before speaking with Norwich city leaders on the proposal to revive the Sachem Fund.

c.bessette@theday.com