WATERVILLE — City Manager Michael Roy is trying to make this the fifth straight year that the tax rate will have decreased or remained stable.

The city is looking at a proposed $37.7 million municipal and school budget for 2008-09, a figure councilors and members of the Board of Education will discuss Tuesday. Roy proposes to decrease the tax rate from $24.90 per $1,000 worth of valuation to $24.40.

At 5:45 p.m. Tuesday, councilors and School Board members will hold a joint meeting in the council chambers at The Center. They will look at a financial overview and then review both the city and school budgets. A regular council meeting will follow at 7 p.m.

Roy said both he and Mayor Paul LePage have shared a goal of reducing the tax rate each year.

“I think the good thing in addition to that happening is that our fund balance has also grown,” Roy said Monday. “Our surplus has grown in five years and has more than tripled, and now we feel it’s time to start using some of that surplus that’s been building.”

The proposed municipal budget is $17.7 million and the school budget, $20 million. The total of those budgets — $37.7 million — represents a $2.2 million increase over the $35.5 million budget approved for 2007-08.

But $2 million would be taken from surplus and used for capital improvements to the Waterville Public Library and public works facilities and to buy a truck for the Fire Department and vehicles for public works, according to Roy.

“The bottom line is not an increase because the $2 million for capital improvements is proposed to come out of our surplus and not out of money from taxes,” he said.