New London — Mayor Michael Passero on Thursday presented the City Council with a proposed budget for fiscal year 2016-17 that does not contain a tax increase thanks in part to an increase in revenues and a decision to flat fund educational spending.

“The document certainly is not going to please everyone. It may not please anyone,” Passero said. “Compromises had to be made and not everyone is going to get everything they want.”

The $88.35 million proposal contains a $1.99 million, or a 2.3 percent increase, over the $86.4 million adjusted budget for 2015-16.

Passero said the increase is offset by a net increase in revenues attributed to local taxes and state aid. The budget will maintain the current tax rate of 39.49 mills.

The Board of Education had forwarded a request for $43.5 million in city funds toward its $64.6 million proposed budget, a $1.06 million or 2.5 percent increase.

Passero said he decided not to increase spending over the school board’s current $42.4 million budget.

Accommodating the school board’s request would have necessitated a tax rate hike of about 0.9 mills, he said.

Unlike the increase in general government revenues, Passero said revenues attributed to the education side decreased by $213,534 and level funding was achieved only by appropriating enough money from the government side to offset the losses on the education side.

“I struggled with the decision,” Passero said. “I want to support education, the new superintendent ... and I know they are suffering deep revenue losses. But I didn’t have the revenue to support all of their losses.”

The $45.9 million in proposed general government spending represents a 4.6 percent increase, but what Passero calls a “status quo” budget.

The increases are driven by an $832,324, or 16.8 percent, spike in debt service expenses and a $580,000 increase in the police department budget.

Finance Director Donald Gray said the proposed increase in police spending is mostly related to the new police contract signed late in 2014 and associated overtime expenses.

Along with raises, the contract gave an extra day off for patrol officers every two weeks.

Gray said the cost of the new human services director position, budgeted at $131,270, is offset by about $25,000 gained from the Community Development Block Grant program.

Passero said the budget eliminates "any significant new spending," with the exception of a $37,500, or 5 percent, increase to the New London Public Library's $750,000 budget.

Overall spending increases are offset by real estate and personal property tax revenues projected to increase by $1,032,494 and an estimated $1.1 million increase in state aid.

Further details on the expected revenue hikes were not immediately available.

The budget was restructured this year and shifts fringe benefit expenses into the departments that incur the expenses.

Passero said that was done to more accurately reflect the true costs of each department.

It also makes expense comparisons difficult.

Passero’s address to the City Council came with little fanfare and lasted about 10 minutes.

Council President Erica Richardson said the council will meet with department heads between April 5 and April 11 as part of the council’s own budget deliberations.

Councilor Don Venditto, a member of the council’s Finance Committee, said his first impression of the proposal was that it sounded fair and it appeared the department heads had worked hard to put forward “realistic numbers.”

g.smith@theday.com