NEW MILFORD — The Board of Finance added $702,000 in spending to the town budget proposal going to voters, including $500,000 for the schools.

The proposed budget totals $101.6 million, about $583,000 more than the current year. It includes $63.3 million for the schools and $38.3 million for the town. The additional $702,000 will be taken from the undesignated fund.

Town Council had approved a $100.9 million budget, which kept school funding level and cut town spending by about $120,000.

The council plan — which rejected the schools’ original request for $1.4 million more than this year — sparked an outcry during a public hearing last week.

During their meeting on April 11, finance board members agreed the schools need more money. Members Barbara Wolf and Joseph DeGregorio, as well as alternate member Korey Linder, suggested adding $800,000 to school spending to help cover contractual increases for salaries and other expenses.

“As long as it’s going up, I’m happy,” DeGregorio said.

The finance board also approved restoring the fire departments’ $250,000 shared capital contribution, a position in the youth agency, self-sustaining grant programs at the Maxx and Youth Agency and $80,000 for the Visiting Nurse Association.

DeGregorio also suggested restoring a $7,800 cut in the Candlewood Lake Authority’s requested $79,900 contribution from the town, but the proposal did not get a vote. Under the authority’s rules, however, the town must pay the full amount if three of the five lakefront towns have committed to do so, and Brookfield, Danbury and New Fairfield already have.

By pulling the $702,000 from the undesignated fund, the proposed increase in the property tax rate was kept at the 3.87 percent approved by Town Council. DeGregorio and Chairman Walter O’Connor opposed using so much of the fund to cover operational expenses.

Finance Director Greg Osipow said the $702,000 restoration would leave $16 million in the fund, but advised the board not to proceed with it. Town policy is to keep enough money in the fund to cover 1.5 to 2.5 months of operations, or $12.5 million to $20 million.

“I need to voice my concern,” he said. “While we are in the range of our fund balance policy, that change is not structural and we’re going to be starting next year with a big hole.”

The finance board was scheduled to set the date for a budget referendum at last week’s meeting, but adjourned before doing so.

A special meeting will be scheduled to set the referendum.