Town Manager Eric Peterson presented a $7.14 million operating budget to the Town Board this week.

It would increase the local tax rate from 63.5 to 68.5 cents per $100 valuation. The owner of a home assessed at $200,000 would pay $1,370 in town property taxes, or $100 more than this year.

The Orange County manager has yet to propose her recommended budget. Hillsborough residents pay a countywide property tax in addition to the town tax.

The town's water and sewer rates would also go up under Peterson's budget. For in-town customers using an average 3,000 gallons a month, the monthly water and sewer bill would rise $3 to $44.49.

For out of town-customers, who pay higher rates, the monthly bill would rise $5.84 to $86.75.

"The economy has really made it difficult," said Peterson, who noted that Chapel Hill and Carrboro are also facing local property tax-rate increases.

Hillsborough has several park projects under way and has to replace old equipment including a 15-year-old Fire Department ladder truck, Peterson said.

Meanwhile, much of the growth in town has come in public projects like the new Durham Technical Community College campus that don't pay taxes, he said.

The town will hold a public hearing on the budget May 29 before approving the budget in June.