It's about potential development in town, and whether spending money to make money down the road makes sense right now.

The Economic Development Corporation took center stage Tuesday as joint budget meetings began on New Milford's $91.373 million budget proposal for 2011-12.

A $30,000 request for more funding to develop the corporation, initiated in 2010, was cut by Mayor Pat Murphy from the Economic Development Commission proposal.

"With the $30,000 seed money allotted in the last budget, I'm recommending we don't put more money in at this time," the mayor said Tuesday. "I'm certainly supporting the corporation, the board of which we are still forming."

"But that seed money is still there," she reminded "As time goes by, we may adjust that."

With the current economic climate in mind, the mayor tightened budget requests from all department heads by an overall $3 million in her budget proposal.

The question was raised Tuesday whether the town could afford to skimp on funding needed to attract and keep businesses in the community.

"Since 2008, the economic development office allotment has dropped by 35 percent," said council member Tom Esposito, who also sits on the Economic Development Commission.

"What (economic development supervisor) Vin (Nolan) is doing is phenomenal with his reduced staff," he continued. "But we all know economic development has to occur. I'd like to see this budget line grow."

When looking at the mayor's approved $77,898 for the development office and $8,660 for the development commission, Mr. Nolan said he could understand the mayor's conservative approach.

"I feel somewhat comfortable pulling back on funding for the corporation given that we have some private sector investors showing support," he said. "I'll be able to say more about that in seven to 10 days."

Mr. Nolan noted most of his activity over the last few years has been "business retention," keeping already existing businesses stable and surviving.

Still, the town has a "strong industrial sector" with Kimberly-Clark's workforce expansion and the recent acquisition of Chemical Marketing Concepts by Odyssey Logistics & Technology Corporation of Danbury, he noted.

Other economic indicators are also promising, Mr. Nolan added.

Litchfield Crossings shopping plaza under construction at 169 Danbury Road is ready to move to phase two of development, with new businesses poised to move in, he said.

A spring construction start is on schedule for an Aldi Market going in on Danbury Road, by Lore's Plaza, and developer Philip Farmer is in discussions with a restaurant chain to also locate in the Aldi plaza, Mr. Nolan said.

Thanks to the Route 7 bypass opened in November 2009, vacancy rates in buildings along the retail strip of Danbury Road (Route 7 South) have dropped as well, he added.

The joint budget meeting of the Town Council and Board of Finance will focus on the education budget Monday at 8 p.m. in the E. Paul Martin Meeting Room at New Milford Town Hall.