WOONSOCKET — Mayor Susan D. Menard submitted a $115.7-million budget yesterday that calls for a 3.85-percent tax rate increase — only the third tax hike in the mayor’s 12-year administration.

“In my 12 years as mayor this is the most difficult one I have had to put together,” Menard said yesterday, citing a decrease in state aid and increases in fixed costs such as state pension contributions, health care and debt service.

The 2007-2008 budget, which includes $5.5 million in new spending, is projected to raise residential taxes by 48 cents, which would bring the tax rate from $12.40 per $1,000 in assessed value to $12.88.

Factoring in the city’s homestead exemption — a property-tax discount given to residential owners as a way of easing the tax burden — residents with single-family homes valued at $200,000 would see a $72 bump in their property taxes.

Taxes on commercial property would rise from $30.75 per $1,000 of assessed value to $31.81, and the motor vehicle tax would remain at $46.58 per $1,000, Menard said.

Menard stressed that her proposed budget is based on the latest numbers in Governor Carcieri’s budget proposal. In the midst of a two-year budget crisis, the state’s projected deficit is more than $400 million.

Menard has budgeted for a $100,000 decrease in state aid for schools and level funding in general revenue sharing from the state.

“I can’t tell you how the General Assembly is going to balance the state’s mess,” Menard said.

The budget is now in the hands of the City Council, which will hold a public hearing on May 29 at 7 p.m. The budget will go before the council for final approval on June 18.

Menard said three fixed costs are driving the increase: a $600,000 increase in pension contribution payments, a debt-service payment increase of $320,000, and contractual salary increases totaling more than $600,000.

As a result of those costs, Menard has allocated $200,000 to the schools, less than a third of the School Department’s $634,000 request.

Menard said that request, which was the maximum the schools can receive from municipal governments, would have put Woonsocket over the 5.5-percent cap.

Schools Supt. Maureen B. Macera, who said she is “glad [Menard] is giving us any amount of increase,” said the allocation would most likely mean a reduction in staff.

“I respect the mayor, she has to do what she has to do and I have to do what I have to do,” she said.

khayes@projo.com