Bath voters approved a charter change to expand items excluded from the city’s annual spending limit by a vote of 1,773 to 876 Tuesday.

City leaders advocated for the change, saying it would avoid $900,000 in budget cuts while not raising residents’ taxes.

In 1988, voters approved a spending cap to keep tax rates low. The cap fluctuates because it is based on the National Consumer Price Index, which measures the average change in prices of goods and services.

With the charter change passed, the list of what is excluded from the spending limit will broaden to include legally necessary costs like employee programs and county taxes, according to City Manager Marc Meyers.

Some expenses, such as grants, voter-approved bonds and insurance proceeds, don’t count toward the city’s spending limit.

A change is needed because a tax agreement the city, state and Bath Iron Works made in 1997 to help the shipyard be more competitive is set to expire Sept. 30, 2023. Revenue the city gets from the BIW tax agreement covers expenses like city salaries, road and infrastructure projects and economic development. Those expenses don’t count toward the city’s spending limit.

In total, 7,497 Bath residents voted in the election, representing a 38% voter turnout.

This story will be updated.