WOONSOCKET, R.I. (WPRI) -- Woonsocket Mayor Christopher Beauchamp has proposed a $167.1 million tax-and-spending plan for the fiscal year beginning July 1, including a tax hike for both residential and commercial property owners.

The mayor, who took office after former Mayor Lisa Baldelli-Hunt abruptly resigned in November, said the increased tax rates are needed in part because of recent settlements the city has reached with commercial property owners who argued they've been overtaxed for years.

"It's not a big increase, but we've got to do what we got to do to balance the budget," Beauchamp told Target 12 on Wednesday. "It's the hand I've been dealt with and we're going to deal with it."

The newly released budget shows the residential tax rate would increase 4% -- or 56 cents -- to about $14.54 per $1,000 of property value. For commercial owners, the rate would likewise increase 4% -- or 42 cents -- to $10.91 cents per $1,000 of value.

Looked at another way, a taxpayer currently paying $3,000 per year would see their tax bill increase by $120.

The proposed budget -- which now will be vetted by the City Council -- leaves the city's homestead exemption unchanged. Beauchamp has proposed steering unused federal American Rescue Plan Act funds into different departments for one-time expenses to help balance the budget.

"In that way, we don't have to use general fund money to pay for things like police cameras," he said. "It's a one-time ARPA allocation and we used it for one-time things in the budget so they're not recurring costs."

The budget shows Beauchamp wants to allocate $605,000 to cover tax credits and overpayments stemming from recently settled lawsuits tied to the inflated property assessments.

As Target 12 reported last week, the City Council just approved two settlements with commercial property owners, which were among several ongoing tax disputes that began in 2019 when owners saw their assessed values soar under Baldelli-Hunt.

Beauchamp estimated the settlements reduced the city's commercial tax base by about 2.45%.

The mayor has proposed spending about $101 million on schools, representing about 60% of the overall budget. The city would be responsible for $16.6 million of those costs, with the state and other sources covering the rest.

In a letter to the city clerk, Beauchamp acknowledged it's a challenging budget year. He pointed to the tax settlements, along with "negotiating collective bargaining agreements with three unions, and coping with general inflationary cost increases."

"Generally, it now costs us more to hire and keep quality employees and to purchase equipment and materials," he wrote.

Other cost drivers he highlighted included police and fire longevity, pensions, and increased trash and recycling fees the city pays to the central landfill.

The City Council will now review the proposed budget and decide whether it requires changes.

"I'm sure the council will have some objections to the budget, but when we have the public hearing we will have that discussion," Beauchamp said.