DERRY | Despite a tough year financially, the proposed budget for fiscal year 2007 doesn't reflect any cuts in service or personnel.

In order to compensate for a $335,000 budget shortfall, there are no increases in any department's operating budget. That compensates for increases in pension contributions and insurance costs. There will be no staff additions and no new initiatives.

The proposed $36.8 million budget does not include possible salary increases for the town's seven unions because contract negotiations are ongoing. If increases in salaries are negotiated for union members, cuts will have to be made in either town services or personnel to get the budget under the 3.2 percent tax cap.

"It's a difficult spot to be in," interim Town Administrator John Moody said. "I'm optimistic that we'll come to agreement with our collective bargaining units."

The proposed budget would add 24 cents to the tax rate. For a home valued at $250,000, that's a $60 tax increase over the 2006 tax rate, or a total bill of $5,600. The budget is $1,844 under the tax cap, and $2.4 million less than last year's approved budget of $39.1 million.

Town councilors are scheduled to begin going over the budget in detail on Tuesday, April 10, at 6:30 p.m. at the Municipal Center.

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