When it came to choosing a tax rate for Newcastle, there were two primary motivations Monday, July 14.

The Newcastle selectmen had to balance a lower tax rate to make the town attractive, while still having enough overlay to add to the reserve fund.

In the end, the town will tax $17.40 per $1,000 of assessed value, which is up from the flat-funded $15.90 of a year ago.

Assessor's agent Bill Murphy spoke to the town's new rate, saying that the proposed rate would offer the best balance between trying to keep taxes low and leaving the town some wiggle room.

“You spoke of eventually building that fund back up, and to that end the $17.40 tax rate would provide that cushion,” he said. “This way, you won't be cutting it so close to the bone at the end of the year.”

Last year, the flat-funded rate of $15.90 per $1,000 of assessed value helped keep the tax rate low, but eventually changes will have to be made, Murphy said.

“There is a balance there,” he said.

Newcastle's current reserves are less than $20,000, which was the result of a changing fiscal year, which left the town without tax revenues for six months several years ago, Selectboard Chair Brian Foote said.

“We should have ($500,000) to $800,000 saved,” Foote said. “In fact, we did have it, and now we need to put it back.”

There is a concern, however, that a rising tax rate could snuff out new homeowners and businesses. In the 10 years between the 2000 census and the 2010 census, Newcastle's population increased by four people.

The town may not need to expand, but it will need new revenues, Selectman Ben Frey said.

“What we need to is broaden our tax base,” he said. “We may have to get creative, but we still need to expand our tax base.”

Frey has been at the helm of the town's recent attempts to draft a land-use ordinance and mentioned that a new document could outline ways the town could expand its tax base.