MIDDLETOWN — The Town Council last night approved a $61.4-million budget for the 2009 fiscal year, halving the proposed cut to the School Department’s budget and delivering a 3.36-percent residential tax hike.

The council had weighed cutting the schools’ budget by $186,000 to close in on a 3-percent tax hike. But parents, school officials and students bemoaned the proposal, saying it would jeopardize the all-day kindergarten program, middle school sports and a school nurse.

Instead, the council agreed last night to cut the school district’s spending proposal by $93,000, to nearly $22 million, a reduction school officials said they can manage.

“We understand the situation and the dilemma the Town Council faces, and we wanted to somehow meet you half way in the reduction,” Schools Supt. Rosemarie K. Kraeger told the council. “It’s not going to be easy. There will definitely be reductions, I want to be clear on that.”

Kraeger said all-day kindergarten is now off the chopping block, but the School Committee will weigh other cuts over the next few months.

The $61.4-million budget represents a $3-million, or 5.2 percent, increase over fiscal 2008 spending. The 2009 fiscal year begins today and ends June 30, 2009.

The residential tax rate will jump 37 cents, to $11.38 per $1,000 of assessed value. The average homeowner with a house valued at $380,000 will pay $4,324 in property taxes, a $141 increase over current taxes.

The commercial tax rate jumps to $15.14 per $1,000 of assessed value from $14.65.

Councilman Robert J. Sylvia proposed fully funding the schools’ request while maintaining a $124,000 reduction to municipal spending. Councilman Edward J. Silveira Jr. suggested peeling money from the town’s so-called “rainy-day” fund to approach a 3-percent tax hike.

But the full council, in the end, rejected both ideas and settled — with Silveira opposed — on a 3.36-percent hike. Council President Paul M. Rodrigues said the compromise balances the needs to support the school system and protect taxpayers’ checkbooks.

The council agreed not to budget for any of the $120,000 share Middletown would see from increased Twin River casino revenue, with Councilman Louis P. DiPalma calling it a “windfall” the community can’t count on.

“That, to me, is like winning a lottery ticket,” Rodrigues said of the odds of Middletown actually seeing those dollars. “The sad part is some of the communities actually have budgeted it.”

Notably, the budget adds a $50 annual fee for residents who use the town’s curbside trash-pickup program and reduces the cost of the pay-as-you-throw trash bags to $1.75 for 15-gallon bags and $2 each for the 33-gallon bags, in an effort to boost participation and revenue. The fee and price changes will go into effect in September.

The program’s estimated $484,000 shortfall should be closed after also allocating about $144,000 in capital-improvement money and $289,000 from the general fund, officials have said.

Sylvia opposed the move, saying he doubts the user fee will be enough to make the program solvent.

“We’re going to go into debt with this program again,” Sylvia said. “It does not stop the bleeding and we’re going to bleed at a more rapid rate than we are now.”

The average household, which uses two of the larger trash bags weekly, will now pay about $310 annually to use the municipal trash service, about $100 less than what households pay for private trash haulers.

The annual beach sticker for residents will jump by $5, to $50, and by $10, to $100, for nonresidents in 2009. The sewer rate will jump just 10 cents, to $11.20 per 1,000 gallons, and associated charges will increase modestly.

mwims@projo.com