FAIRFIELD — The first selectman is proposing a $294.3 million municipal budget for 2016-17, reflecting a 1.09 percent increase over this year’s spending package, the second lowest increase in 20 years.

The spending plan for the new fiscal calls for a $730,000 reduction to the Board of Education’s budget request and, if the budget remains unchanged as it goes through the approval process, would mean a projected tax rate of 25.57 mills.

Under First Selectman Michael Tetreau’s proposal, the school board’s budget would be $164.7 million, or 2.14 percent more than this year’s $161.2 million budget. The town side of the ledger would decrease, from the current $130 million to $129.7 million.

Tetreau said his budget proposal does not reduce or defer any services, and said the factors helping to contain costs in the town side of the budget result from a new health-care plan, lower annual debt service, lower worker’s compensation expenses and lower fees and professional services.

On the education side of the budget, the first selectman said his lower figure represents an “administrative adjustment” that would not have a direct impact on students, teachers or curriculum. He said a change to a premium-based health insurance plan eliminates the need for maintain substantial reserves for future claims.

“While overall it is hard not to be happy with the number, as always, the devil is in the details,” Board of Finance Chairman Tom Flynn said in his initial reaction to the proposed budget. “We need to go through the detailed budget process to understand the drivers, assumptions and whether the numbers are based on one-time items or long term repeatable actions. I look forward to the review process.”

Selectman Chris Tymniak, reacting to the proposed spending package, said, “I'm relieved that the first selectman has proposed a modest budget increase. We plan to analyze the viability of the proposal throughout this process. We are very interested in the four outstanding labor contracts, which cost increases do not appear to be factored into this budget; the health-care cost projections that were used, and the cost of long-term debt service.”

The budget will first be reviewed by the Board of Selectmen, followed by the Board of Finance, and finally, the Representative Town Meeting. Once a final budget is adopted, it is up to the Board of Finance to set the new tax rate to finance the spending. The new fiscal year starts July 1.

Besides the school district, among the other large town departments, the Fire Department requested $13.07 million, an increase from the current $11.9 million. Tetreau, however, is recommending $13.03 million.

The Police Department’s $14.6 million request was not changed. The department’s current budget is $13.2 million.

The Public Works Department’s operations budget is now $15.4 million, and the first selectman made no changes to its $16.02 million request for the coming fiscal year.

Also unchanged by Tetreau was the Fairfield Public Library’s $3.9 million request, an increase over its current spending of $3.8 million.

Tetreau said his budget proposal includes the annual recommended contributions to pensions and other post-employment benefits, higher road paving costs, higher sidewalk maintenance, more public works equipment, more support for the town’s Bigelow Center for Senior Services and elderly tax relief, and a supplemental contribution to the budget surplus account.

“Working together, we can keep Fairfield a fiscally strong and valued home for our residents,” Tetreau said. “As we continually work to strengthen our financial foundation, we strive to maintain a high level of service for all residents.”

Tetreau said his adminstration plans more discussions with the labor unions and employees to manage long-term liabilities.

Because of the recent townwide property revaluation, some residents may see a decrease in their tax bills once the mill rate is formally set. Tetreau said the changes in property assessments will have the largest impact on taxes.

Following the revaluation, about 40 percent of properties saw an assessment decrease of 3 percent or more. To determine a property’s tax bill, divide the assessment by 1,000 and then multiply that by the mill rate.