New London — The City Council moved one step closer to passing a city budget for fiscal year 2016 on Monday night as it unanimously approved the second of three readings, this time endorsing a budget that would limit the increase in city spending to about 1.30 percent.

The spending plan the council voted in favor of includes $43,919,919 on the general government side — which is about $95,600 less than the current budget — and $42,445,400 for the Board of Education — an increase of about $1.2 million over the current budget.

The budget as approved Monday night would necessitate a 1.40-mill tax rate increase from 38 mills to 39.49 mills. 

Before the full council voted on the budget’s second reading, its Finance Committee made a series of changes, including restoring $100,000 of the $300,000 that had been cut from the line item to fund health insurance and making additional cuts to about two dozen other line items.

“We did a considerable amount of moving around in the line items and additional cutting, and we have restored significant sums of money to a couple of the major line items that the administration was particularly concerned about, including health insurance,” Councilor Michael Passero said. “I believe that we’re moving forward and we are still keeping the general government side below the current spending level.”

Representatives of City Center District, which includes downtown residents, and business and property owners, told the council of ideas to improve the budget process in future years, including holding annual tax rate increases to no more than 2.50 percent and having local businesses offer incentives to city departments that find creative ways to raise revenues and spend responsibly.

Dennis Downing, the co-chair of Looking Out for Taxpayers, thanked the council for its work to limit city spending and announced that LOT will not petition to referendum the city budget as it is presently constituted.

The first reading of the budget, approved by the City Council last month, had included $43,958,565 in spending on the general government side — a decrease of $36,966 over the current year’s budget, and $43,282,280 in spending on the Board of Education side — an increase of $2,026,574 over the current budget.

The City Council will debate and vote on the third and final reading of the budget at a special meeting to be held Wednesday, May 27.

c.young@theday.com

Twitter: @ColinAYoung