Long known for their Yankee thrift, Chilmark officials were caught by surprise this week by an initial budget forecast that would require a funding increase of nearly 10 per cent.

Gasps were audible at the first financial advisory committee budget hearing with the board of selectmen Tuesday night, as the selectmen and committee grappled with ways to reduce a budget inflated by school budget assessments and increased demand for public services.

Based on preliminary numbers, the total town budget was projected at $7.7 million, up around $650,000 from last year, compared to just a $238,000 increase in the previous budget. In addition to the budget, voters will be asked to approve about $600,000 of articles at the annual town meeting in April.

“I’m stunned,” said selectman Warren Doty. “Every budget has to be hit, and every department should be if we’re not going to send a 10 per cent increase to voters . . . departments can get staff the way it is and almost nothing else. It’s just this year. We’re going to be very hard pressed.”

The financial committee was originally presented with a 9.4 per cent budget increase, but in the past two days of hearings, the committee has stripped that down to 9.1 per cent and is expected to continue to cut away noncritical expenditures.

At the heart of the increase are public services — school budget assessments, a new library reservation system and new police patrolman position. This is also the first year the town will start retiring debt for the $1.3 million new Menemsha pier connector, a $130,000 annual budget hit.

Education expenses make up the second largest percentage of the town’s overall budget after employee salaries, and between increased assessments at both the elementary and high school level, the education line item is up nearly 12 per cent over last year for a total of $2.7 million, or a $281,000 increase.

Town administrator Tim Carroll said yesterday the financial advisory committee is taking “drastic measures in each department” to pay for increased school budgets.

This week the Up-Island Regional School District committee certified a budget of $8.74 million, a 5.8 per cent increase from the previous year. Chilmark’s assessment this year is nearly $2 million, also up 5.8 per cent over last year, or $109,000. The Martha’s Vineyard Regional High School assessment for the town is $690,620, a 33 per cent increase over last year, or $173,000.

For town employees, the human resource board is proposing a 3 per cent cost of living adjustment (COLA), up from 2.6 per cent last year and none the year before, but Mr. Carroll said it wouldn’t be fair to take the COLA away from town employees who might see only this increase during the year.

“If we did that it would only affect a part of the budget because the salaries for the school department are done by contract,” Mr. Carroll said.

“We’re cannibalizing other departments to pay for education so to then go back and take the COLA away from the other half of the employees when it’s the only increase they get, isn’t really fair. Yes, [reducing it] is on the table but it hasn’t been discussed.”

Town accountant Emily Day said at Tuesday’s hearing that as an exercise she calculated that the financial committee would have to shave off $416,000 throughout the budget to reduce the budget increase to 3.5 per cent.

Mrs. Day said given the preliminary budget estimates without the warrant articles, the tax rate would be $2.29 per $1,000, a 16 cent increase from last year. A 3.5 per cent overall budget increase would bring the tax rate down to $2.15 per $1,000 or a 2 cent increase.

“Those are the extremes,” she said. “I’m not sure we can cut $416,000 but I don’t think anybody’s going to pass a 9.4 per cent increase. It’s going to have to be somewhere in the middle.”

Mrs. Day suggested the financial advisory committee and the board of selectmen either target a tax rate they are comfortable with or determine a dollar or percentage increase to the overall budget.

Mr. Doty noted the town has around $246,000 of free cash available right now and the town could choose to put that back into the budget to offset some of the costs.

“Tim [Carroll] often doesn’t approve of that idea because it builds your budget wrong but it is a choice for us,” Mr. Doty said.

Even with departments being asked to level-fund as much as possible, Chilmark police chief Brian Cioffi stood firm on his request for a new patrolman, a $60,000 position. The chief said he intended to make cuts in other places in his budget to free up the money for the new position. The police department budget, which is still preliminary and will be discussed on Thursday night in a joint meeting with the financial advisory committee and the selectmen, is overall up eight per cent for a total of $602,000. There are currently four full time police officers — the chief, sergeant, detective and patrolman — and the department is filled in with special officers and summer traffic officers. The addition of another patrolman would be the first since 1988.

Mr. Cioffi said the overall growth of the department has expanded but they’ve been working with the same amount of staff for the past 24 years. He and Mrs. Day looked at seven different scenarios within his existing budget to make room for the needed position without cutting too many seasonal positions.

Other increased line items include the library, which is hoping to join the Cape Library Automated Materials Sharing (CLAMS) with an additional $13,200 in annual dues. CLAMS is a nonprofit cooperative of libraries on the Vineyard, Cape Cod and Nantucket that allows any in-network patron to borrow books and materials from some 36 participating libraries. Aquinnah and West Tisbury have similar line items in their budget as they too hope to join Edgartown, Oak Bluffs and Tisbury as a part of the network.

And as Chilmark begins to grapple with its increased budget, the other two up-Island towns are also bracing for increases. West Tisbury town accountant Bruce Stone said preliminary budget estimates call for a 3.8 per cent budget hike. Aquinnah town administrator Adam Wilson said because their town meeting isn’t until May budget workshops have not begun yet, but Aquinnah was bracing for harsh impact.

Aquinnah is also considering a three per cent COLA, having not given town employees increases for the past four or five years, he said.

“We do anticipate a significant budget increase because of the certainty of the assessment coming from the up-Island regional school district,” he said. Aquinnah’s assessment is up 32 per cent this year from $563,000 to $743,000.

This article has been revised since publication.