New London — The mayor has proposed a streamlined budget for 2013-14 that calls for a $1 million cut in municipal spending.

But because of a $2.7 million reduction in state and federal revenues, the tax rate could increase by about eight-tenths of a mill and cuts could include laying off police officers, shutting down the senior center, closing a fire station and cutting in half funding for the Public Library and the Parks & Recreation Department.

"This is learning to live with a new economic reality,'' Mayor Daryl Justin Finizio said Monday night as he presented the budget and his 2013 State of the City Address at City Hall.

The City Council will review the proposed budget during Finance Committee meetings scheduled for 4:30 p.m. April 8 and April 10 and 5 p.m. April 11.

"The City Council is going to have a significant role in this budget and we'll spend weeks going over it,'' Councilor Adam Sprecace said later in the evening.

If the budget is approved as presented, the tax rate would increase by 0.82 mill, from 26.6 mills to 27.42 mills. A property owner with property assessed at $100,000, which is 70 percent of the fair market value, would pay about $80 a year more in new taxes.

"This is not a budget that can avoid a tax increase,'' Finizio said. "Revenue losses and mandatory cost drivers present a situation that we simply cannot completely cut our way out of."

The $81 million budget for 2013-14 represents $40.2 million for general government and $40.8 million for the Board of Education.

The general government proposal is 2.6 percent less than the current year's budget of $41.3 million.

The school board has requested a 2.5 percent increase over the current year's budget of $39.8 million, or $997,261. The extra money would be spent on 1 percent raises for teachers, administrators and custodians, and the hiring of five new teachers in the elementary schools and a guidance counselor at the middle school.

Finizio said he supports the increase in school spending.

The governor's budget proposal includes a drop of $1.1 million in aid to the city. Another roughly $1.4 million in Mashantucket Pequot and Mohegan grants would be transferred to the Local Capital Improvement Program called LOCIP. LOCIP funds will be disbursed at the request of the city for specific projects. In the past, the Pequot and Mohegan money was spent at the discretion of the city.

Finizio is proposing a $1.4 million cut in the police budget, which could include layoffs; a $500,000 cut to the fire department, which could mean closing a fire station and not filling the deputy chief position; and a $500,000 cut to the Public Works Department, which could mean layoffs and privatization of trash collection.

Another $750,000 could be saved by eliminating the Senior Center, closing the Martin Center and cutting in half funding to the Public Library and the Parks & Recreation Department.

Finizio said Parks & Recreation would be revamped to operate like a community organizing entity, assisting nonprofits and other groups in providing recreation services without a direct cost to taxpayers.

But the mayor also pledged not to "leave our young people and our seniors behind."

He said he would to continue to work with the state to improve schools, help build a community center at no cost to taxpayers, and regionalize operations such as the animal shelter, emergency dispatching and senior services.

k.edgecomb@theday.com