SOUTH PORTLAND – The South Portland municipal budget proposal, which was handed for the first time Monday to the City Council, calls for a 2.5 percent increase in the property tax rate.

The $28.01 million budget includes $843,633 more in spending than the current year, and would add 12 cents per $1,000 of property value to the tax rate.

The public will get an opportunity to discuss the budget with the council at an April 6 public hearing at 7 p.m. at City Hall, when City Manager Jim Gailey officially presents the budget.

Over the last three years, Gailey said, the city has lost approximately $2 million in revenue. Revenue in 2012, however, is expected to exceed 2011 estimates by $431,300. Revenue increases include $60,000 in state revenue sharing, $75,000 in building permits, $252,000 in motor vehicle excise tax and $75,000 in investment income.

In his correspondence to the council, Gailey noted major changes to the budget are increases for Maine State Retirement ($133,500); employee health Insurance ($216,900); gas, heat and oil ($109,659); vehicle supplies ($45,550); police cruisers (15,900) and building maintenance (44,937). The budget also includes a $109,951 reduction in debt.

The major focus of the budget, Gailey said, was to invest more in the city’s infrastructure and employees.

In an effort to increase the city’s investment in its buildings, equipment and vehicles, Gailey has proposed increasing the building maintenance account by $44,937 and the vehicle maintenance budget by $45,550.

Gailey has proposed increasing the training, travel and education budgets by $7,500 to provide more training for city employees. Employees would also be given a 1 percent cost of living increase in the proposed budget.

“Investing in your workforce is one of the most important things a manager can do and in return you’ll see positive morale and employees committing long-term with the city,” Gailey said.

As it stands now, the total operating budget proposal for South Portland, including town spending, school spending, the sewer fund, enterprise fund and grant funding, is $79.96 million, a $1.9 million, or 2.47 percent, increase over this year’s total budget. That figure assumes a school budget that does not include a tax increase, something the council has asked of the Board of Education.

“Even having the ability to increase the budget, very difficult decisions had to be made by the administration throughout this year’s budget process,” Gailey said. “Past year’s reductions and eliminations have had an impact on the organization and over time has put pressure on the ability to provide the outstanding services that our public has come to rely upon. We are constantly evaluating how we are providing the public service. Through the evaluation we are exploring efficiencies and new processes in hopes of providing better services to the residents and businesses of South Portland.”