CHILI — Citing tough economic times, the rising cost of fuel and road salt and mandated health insurance, David Dunning's preliminary budget increased spending by more than $916,000. However, the town tax rate would decrease in 2009.

Dunning said he will use some of the town reserves to offset the increased spending. In his first preliminary budget as Chili town supervisor, Dunning proposed the town tax rate decrease to $3.83 per $1,000 assessed value, down from the $3.85 this year. The total budget is $11.7 million, which represents an increase from $10.8 million in 2008. Several areas saw sharp increases, such as the highway department tax levy, which increased by more than $144,000. The library levy stayed the same, a change from previous budgets.

"We have a tremendous library director and library, but their budget is 75 percent labor and we have to find a way to do things with less money," added Dunning, who said the library budget has grown 151 percent in the last decade.

Dunning began charting previous town budgets in March to get himself familiar with the process and town trends. After spending the last month putting together the 2009 preliminary budget, he has recommended a hiring freeze for next year. And while the preliminary budget proposes 3 percent employee raises, he said, based on job performance some might receive less than that amount.

"We have to start doing more with less," said Dunning. "We always talk about saving money for a rainy day. Well with the economy going the way it has, nationally and statewide, it's raining now.

"We wanted to add more staff in the building department and recreation department, but just like everyone we understand we are going through some hard financial times," he said.

While Dunning can't control the cost of fuel and road salt, he does have power over many budget items, including doubling the budget for next year's 20th anniversary celebration of the Chil-E fest to $30,000.