PORTSMOUTH — A last-minute projected increase of $131,000 in state aid to the local schools eased pressure on a $54-million municipal budget for the fiscal year beginning July 1.

The Town Council last night adopted a bottom line of $56,462,646, with a tax levy of $40,364,490 and the remainder of revenue coming from other sources.

With the new budget, the owner of a median-priced single-family home, valued at about $367,000 in 2007, will face an overall tax increase of a little more than $100.

The unexpected revenue boost of $131,987, if it materializes, will enable the School Committee to restore middle school sports, make it easier to keep the Prudence Island Elementary School open another year, and avoid $45,000 in cuts that otherwise would have been necessary to balance the school budget of $36,268,830.

The added state aid would come from overnight gambling at Twin River, approved recently by the General Assembly.

While the legislature has warned that the revenue projections may fall short, Town Administrator Robert G. Driscoll said last week he was confident enough about the added income to include it in the budget. E. Richard Carpender, chairman of the School Committee’s subcommittee on finance, agreed.

The council, meanwhile, has added $22,000 for civic support that had not been recommended by the administrator, who had been reacting to a 5-percent limit imposed by the state on the amount of new property tax revenue that may be generated by any municipality in the next budget year.

Driscoll also said the effect of the 5-percent ceiling has been exacerbated by budget reductions made at a Special Financial Town Meeting in 2006, lowering the base upon which future increases have been computed.

That 5-percent ceiling on new taxes, which is to become progressively lower in the next few years, resulted from tax relief legislation that went into effect a year ago.

Although the total amount of tax revenue will go up, the rate at which property is taxed will decline by 53 cents, to $10.85, for every $1,000 of assessed value, because of a recently completed property revaluation.

That reassessment has seen a 10-percent increase in the total valuation of property in town over the last three years, from $3.2 billion to $3.6 billion.

While the real estate market is weak, 2007 property values used for the most recent revaluation still exceeded those recorded in 2004, with the median sale price of a single-family home increasing to $347,000 from $340,000 over those three years, according to the town’s appraisal company, Vision Appraisal.

The increase in valuation works against the decrease in the tax rate, so that the owner of a house that increased $27,000 in value will pay about $100 more in taxes beginning July 1.

The overall school and municipal budget, including both restricted and unrestricted revenues, totals $56,462,646, although the operating budget is $54,211,329, with the school’s share amounting to $34,743,070.

Carpender, the vice chairman of the School Committee and its point man on finance, said in a recent interview that the School Department would use the first $45,000 of the extra $131,987 in state aid from gambling to balance its budget, avoiding additional reductions on already lean operations — too lean, according to a recent management study.

The next $28,000 would be used to repay the town for reinstating middle school sports and for paying the schools’ share of debt service on capital building maintenance and repair projects, Carpender said.

There will still be enough money left over to carry the Prudence Island School for another year, he said. According to a ruling by the state Department of Transportation, the town can’t close the school — the state’s only one-room schoolhouse — until it finds suitable transportation for four young children to attend classes in town.

And island residents have said that the cost of providing boat service for the 10-minute ride that separates the island from the Melville section of town would eat up a significant chunk of the savings the district would realize from closing the school.

By nickel-and-diming the rest of its budget, the Town Council was able to scrape together the $22,000 it allocated to community organizations, including the American Legion and its auxiliary, the Red Cross, Boy Scouts, East Bay Community Action, Newport County Mental Health, the Women’s Resource Center, the Samaritans, the Visiting Nurses of Newport and Bristol Counties, and several youth athletic groups.

The budget also provides money to hire one additional police officer and firefighter, although both chiefs had sought to expand their forces by four.

In addition, the town will begin shoring up its general fund, which had dipped to about $1.3 million last year, and gives Driscoll, the administrator, the green light to develop new user fees.

gmacris@projo.com