Groton — Twenty-seven people at Monday's annual budget meeting approved the city's proposed $16.9 million budget for 2017-18 and reduced the tax rate by nearly 4 percent.

The budget of $16,898,657 represents an increase of 0.4 percent over current spending, mainly due to contractual pay raises and increased health care costs. The annual meeting also set the tax rate at 5.22 mills, down from the current rate of 5.432 mills.

There was no discussion, abstentions or dissenting votes on Monday.

“It’s better than I thought it was going to be,” said city resident Paul Contino, adding that he inititally confused the town and city budgets. Groton Town has been struggling with an anticipated loss of millions in state aid, and the Groton Town Council is expected to vote Tuesday on an 8.7 percent tax rate increase. City residents pay both town and city taxes.

“I don’t want to see my taxes go up any more,”Contino said. “It’s ridiculous now.”

City Mayor Keith Hedrick said the city was able to reduce the tax rate because the city's grand list went up, it received money from the town following an arbitrator’s decision about highway funding, and Groton Utilities contributed additional funding. The utility will transfer $4.76 million to the city, budget documents show.

“It’s a relatively level-service budget,” Hedrick said. “We’re trying to be sensitive to the taxpayers’ needs and concerns.”

City Councilor Stephen Sheffield said Groton City may be one of the only municipalities in Eastern Connecticut to lower taxes.