CUMBERLAND - Tax bills arriving in three of four household mailboxes reflect a 4 percent increase or less, says Mayor Daniel McKee.

And among those, 40 percent will actually see their bills go down compared to last year.

The rest, 25 percent of taxpayers, will pay more than a 4 percent increase, he said.

McKee, regrouping after two weeks of citizen concern over taxes to support the current spending year, conceded that the 2004 Scully Tax Cap Ordinance, designed to progressively lower the amount town officials can increase the tax rate over five years, is "flawed" because it didn't take into account the possibility of decreasing property values.

However, he said the $12.38 tax rate set last week "accomplished exactly what was intended to happen."

The new rate represents an average 4 percent increase for Cumberland homeowners, he said.

"I'm sleeping well at night," said the mayor.

McKee is also saying the town can absorb a loss in state revenue without posting a third consecutive deficit.

At the same time, a finance company has raised Cumberland's interest rate because of a new Moody's Investors Service report in April that raised some red flags.

Late last week, as predicted by many, the General Assembly went ahead, with the governor's blessing, and passed a supplemental budget bill for this year that robbed cities and towns of revenues promised last summer. Cumberland is losing about $325,000.

Town Council members, the only legislators in the state setting a tax rate for the current spending year last month, were poised to increase the tax rate to $12.56 to cover the loss but McKee said other funds would be found to cover the loss and dropped the rate to $12.38.

The mayor said this week one option may be delaying the $250,000 payment on the first year of the $1.6 million master lease acquired to cover some of the cost of the Ashton and Cumberland Hill schools additions plus elementary school computers.

Master leases bundle a variety of capital purchases under a long-term financing plan.

Finance Director Tom Bruce said SunTrust Equipment Finance & Leasing of Towson, Md. was the low bidder on the five-year master lease with an original bid of 3.18 percent that rose to 3.34 after the Moody's credit report came out just days after the bid was accepted.

The percent Cumberland must pay rose by $3,412, according to Bruce's figures, over the life of the lease when Cumberland was assigned "a negative outlook" because of increasing challenges in the town's water fund "and further weakening of the town's overall financial strength."

The report noted that years 2006 and 2007 ended with operating deficits of $1.3 million and $2.4 million respectively, "reducing the General Fund balance to a narrowed but still adequate $4.3 million or 7.7 percent of revenues."