The Board of Selectman took its first look this week at a $40 million budget "wish list," jump starting the town's 2009-10 budget season, which promises to be a difficult one.

"It's a tough time, and our budget is going to reflect that people are having a tough time paying for basic necessities," said First Selectman Janet McCarty. "We have to take care of their tax dollars."

The budget, which McCarty emphasized is very preliminary and "written in pencil," includes department head requests, and represents about a three percent increase over last year's budget. The Board of Finance was expected to begin its review of the town budget this Thursday. A significant unknown, however, is the Board of Education budget figure, which has not yet been released. Superintendent Sara-Jane Querfeld will present her budget on Jan. 27 during a special school board workshop. The current school budget is $42.18 million.

Selectman Michael Freda speculated that the overall town budget could reach $83.6 million if the school board approved a 3.5 percent increase this year.

McCarty said that everyone was working to "cinch in" their requests because people could not afford a tax increase. She is planning to ask department heads to take a look at the fees for their services, and consider possibly raising them.

Selectman Steve Fontana agreed saying, "Fees need to more closely reflect the actual cost of what the service is."

The budget workshop on Jan. 20 began with Assessor Gary Johns reporting on the town's grand list. Though it will not be officially set until the end of the month, Johns is projecting a $12 million decrease in the amount of taxable property in town from last year.

Johns said real estate had some degree of growth, a $241,299 increase over last year, mostly from residential homes in town. However, tax revenue from the Universal Drive project does not appear on this grand list.

Personal property saw a significant decrease - $6 million - which Johns said is primarily due to Covidien's over reporting last year. "I'm still investigating it," Johns said. "They're saying that they over reported by $14 million."

The motor vehicle portion of the grand list has also seen a decline by about $13 million. Much of that is due to area towns like Hamden and New Haven discovering several people who use the North Haven zip code but actually live in another town.

According to Freda, based on the current mill rate of 23.5, the town stands to lose about $285,000 in tax revenue because of the decline in the grand list.

However, one decline the town is happy about is the reduction in debt service. Assistant Finance Director Ed Swinkowski said that the town's debt has decreased by $562,000.

McCarty said the town charter requires that the Board of Selectman make a recommendation to the Board of Finance regarding the budget. She asked that Freda and Fontana e-mail her their personal recommendations to be included in her letter to the board. She hopes the board will "work as best they can to get complete value out of every dollar, and work to make sure we have as little increase in every line item as possible."

"The expectation is that taxes will not be raised, and that is my ultimate goal."