Gray voters will be asked to pay for a 2.5 percent increase in municipal spending for the 2008-2009 fiscal year following approval by the Town Council Tuesday night.

In actuality, the Town Council approved a $5.1 million budget with an increase of about 10 percent over last year’s budget. However, Town Manager Deborah Cabana was careful to point out the town plans to use funds in reserve accounts to pay for the majority of the expenses that comprise the 10 percent increase.

The budget passed by a three to two vote, which came after a failed attempt to amend budget items to reduce the total increase from 10 to 8 percent.

“I think the budget is good and responsible, and forward thinking. And it is what it is,” said Councilor Tracey Scheckel.

Councilor Andy Upham motioned to amend several budget items to both cut costs and bolster revenues. He sought to bring the increase down to 8 percent, which he said was high, but “much more manageable.” Councilor Skip Crane seconded the motion, but the three other councilors opposed the motion.

Cabana and the Town Council have suggested nearly $640,000 be spent from the town’s reserve accounts, excess undesignated funds, and a tax increment finance fund to offset the costs.

The projects to be expended from the reserve accounts include things like matching the block grant Gray will receive for downtown improvements, painting the Newbegin Gym, the purchase of the Walker Tire building on Route 100, and a town-wide revaluation.

The position of assistant director at the Parks and Recreation Department was returned to the budget as a fully-funded town employee after a large group of supporters two weeks ago said the position, held by Roger Dehetre, helped maintain the quality of recreation programs in Gray.

Several Gray voters addressed the Town Council during public comment Tuesday night to address particular areas of the budget.

Gray resident Gary Foster said the sizable budget increase could be offset by the use of existing funds. He spoke specifically of the efforts to restore Dehetre’s position to the budget, saying that he disagrees with the notion that it is the taxpayer’s responsibility to provide activities for Gray youth.

“It doesn’t speak well for today’s society to say that it would be a bad idea to cut programs because kids will get busy on their own,” said Foster, referring to a comment made by a resident at the April 1 Town Council meeting.

Another resident, Mark Grover, said he would like to defer the town-wide revaluation for a year, as it’s a $68,000 project that could increase property taxes. But Helen Taylor, tax assessor for the town, said that by law, Gray must do a revaluation this year, because the state requires revaluation when a town exceeds the limit of 70 percent valuation of fair market value. Currently, Taylor said Gray is valued at 69 percent fair market value.

“Although I find this supportable, I don’t know if the public will support it when they look at that increase,” said Grover.

Fran Monroe spoke about the Gray Public Library, saying the budget calls for too many employees. Monroe said the Parks and Recreation Department reaches many more Gray residents than the library, and questioned the Town Council about why they felt it necessary to remove Dehetre’s position from the budget in the first place, when there are more staff positions at the library.

Approaching the end of the public comment period, resident Matthew Sturgis offered thanks, rather than criticism, to the Town Council for the way they handled the budget.

“When it comes down to comments on Parks and Recreation, and the library, you’ve done a pretty good job,” said Sturgis.

Voters will weigh in on the proposed budget at Town Meeting on May 3, at the Newbegin Gym.