BANGOR, Maine — City councilors got their first look at the proposed 2010 Fiscal Year budget, which reflects an increase of about 3 percent that is mostly due to salary and insurance increases for municipal staff members.

City Manager Edward Barrett outlined the initial proposal at a meeting Wednesday but stressed that it’s only a starting point. Bangor leaders are likely to meet up to 10 more times before a final budget is passed in June.

“I’ll start by saying that there is a high level of uncertainty this year, perhaps more than in other years,” Barrett said before citing a number of factors.

Chief among those is an expected decrease of 10 percent in state revenue sharing for Bangor, part of the governor’s proposed 10 percent across-the-board cut to address the state’s shortfall.

The other looming concern, Barrett said, is a citizen-led referendum that seeks to cut the state’s automobile excise tax in half. The issue will be on the state ballot in November and, if passed, it would result in an annual loss of nearly $2 million in city revenue.

“That’s 30 or 40 staff members,” the city manager said. “If it passes, we would have no choice but to cut [employee positions].”

He also said that more than two-thirds of municipal employees are in the police, fire or public works departments — three areas that no one wants to see reduced.

Councilor Rick Bronson said that from what he has heard, he thinks it’s likely the excise tax referendum will pass. He asked Barrett why the city didn’t prepare a budget that considers that scenario.

“It would be punishing residents for something that hasn’t happened yet,” Barrett replied, but agreed that if the election were held today the referendum almost certainly would pass. “People think that revenue goes to the state and people are mad at the state. I think it’s a matter of educating people.”

Opponents of the excise tax cut, Barrett included, have said that the taxes pay — almost directly — for the many road and bridge repairs throughout the state.

Councilor Hal Wheeler said he hopes there is a strong campaign against the excise tax proposal or Bangor’s budget decisions could be even more difficult.

Other than the pay increases for employees, the proposed budget has virtually no additional program requests. The budget does include about $3.6 million in requests for capital improvements, although Barrett said those projects would be paid for by sources other than tax revenue.

If the 3 percent budget increase holds up, Bangor’s mill rate would go from $19.05 to $19.60 per $1,000 of property valuation.

Councilor Geoffrey Gratwick said the cost-of-living increases for employees seemed to be an “elephant in the room,” that would have to be addressed in later budget sessions, particularly if the excise tax cut is approved.

“Would we still eliminate 40 positions or would we consider freezing wages?” he asked.

“That’s something you’ll have to consider,’ Barrett replied.

The next budget meeting will be held on Thursday, April 23.