OLD ORCHARD BEACH — The Town Council has approved a $16 million municipal budget for the coming fiscal year that reflects a 3-percent increase over the previous budget.

The council voted unanimously Tuesday night to approve the budget, which includes a $14.8 million operational budget and a $1.2 million capital improvement budget.

To help offset taxes, $550,000 was appropriated from the unassigned fund balance, and $525,000 was taken from ambulance fees revenue fund.

The budget does not include the $13.4 million school spending plan, which needs final approval from voters on the June 14 ballot.

Should voters approve the school budget, the town’s mil rate will increase 55 cents to $15.73, according to Town Manager Larry Mead.

The proposed tax burden will be offset for year-round residents by the increase in the state homestead exemption.

For a year-round resident, the tax increase to a $200,000 home would be $34 annually, according to Mead. The increase on a $200,000 house that is not a primary residence would be $110 annually, he said.

— Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or [email protected].