BROWNSBURG — Grant Kleinhenz, town manager here, says that one of the messages from the town’s proposed 2013 budget is that town officials are working hard to lower taxes, and that goal has been met with a potential tax rate reduction of 12.4 percent.

The 2013 budget will be read three times before a scheduled final adoption on Oct. 11.

“The proposed tax rate reduction is just over .1008, which will bring our rate from .8118 to .7110,” Kleinhenz said. “There are two main reasons for that. One is due to the east annexation where we added roughly $40 million to our assessed value, which allowed us to spread our current rate over more taxpayers and reduce that rate by a fairly good amount.”

He said they were also able to require less money for the town hall building complex debt service for 2013 and that also contributed to lowering the rate.

He said the town has settled a lawsuit with a construction contractor that had monies tied up in a large escrow account and his recommendation was to use those funds to pay the debt down slightly. The return amount was $500,000.

“I don’t think it’s very typical unless you have a large amount of growth, but it’s tough to lower at any rate,” Kleinhenz said. “The proposed general fund is $147,000 less than last year, which is a 1.8 percent reduction in our expenditures over last year. While this may not be possible every single year, we’re trying. It’s a pretty good sign that the town is lowering taxes.”

One of the changes that allowed for such a reduction was the removal of longevity pay for town employees that have worked in their positions over a long period of time. The system was put into effect in 2010.

“We appreciate our employees, particularly those that stay and become more valuable with training,” Kleinhenz said. “We went back to an older system just to be in line with the tough times that are going on and I think this year we saved about $40,000 and over a 10-year period, it will be over $1.3 million in benefits that have been scaled back.”

Town employees can still obtain pay increases as a pay-for-performance program replaced the longevity pay program.

Town Council President Dwayne Sawyer applauded the work that led to the proposed tax cuts.

“I think it goes to show that after years worth of good stewardship, conservative metropolitan planning, and being aware of what’s in front of us, we can produce an over 12 percent tax cut,” he said. “Hats off to Grant and his team for working hard, not only to lower the budget and come in under budget again, but to be able to offer the reduction. I used to live in a city in California that’s now bankrupt, so I’ve seen both ends of the spectrum, and I’m happy to say we can give our citizens a tax reduction.”

How the tax cuts effect individual residents will differ, based on whether they are at the property tax cap.

The first reading of the proposed budget is slated for the town council meeting at 7 p.m. Sept. 13 at Brownsburg Town Hall.

Once town officials approve a budget, it goes to county officials for approval. If the county approves it, it will be sent on to the State Board of Accounts for final approval.