Hartford plans to spend $1.5 million less in the new fiscal year, but the city will need to use $8.3 million in savings to make up for an even larger decline in state aid.

The city will spend just under $539 million while revenue will decline to $530 million, according to the city budget for fiscal year 2013-2014.

The mismatch in the spending reduction, about .3 percent, and the drop in revenue, nearly $10 million or 1.8 percent, results in a shortfall. The city will cover it by reducing its fund balance, currently $26.6 million, leaving just $16.3 million.

“This was done to avoid a mill rate increase and will still leave us with a reserve greater than New Haven and Bridgeport,” Mayor Pedro Segarra said in his budget message.

The budget, released in early August, predicts that spending will decrease in areas such as operating expenses and debt service. Both education and library spending are expected to remain flat for the “foreseeable future.”

Almost half of Hartford’s revenue is expected to come from property tax. Just over 45 percent will come from intergovernmental revenue. This percentage is not expected to increase due to “financial stress” on the state budget.

The city’s mill rate will remain the same for the second year in a row.

Unlike the rest of Connecticut’s cities and towns, which tax property based on 70 percent of its market value, Hartford taxes property in three tiers. The city assesses businesses and cars at the normal 70 percent rate, while it taxes apartment buildings on 55 percent of market value and homeowners on 29.2 percent.

Property tax revenues are expected to rise by $5.3 million or 2.1 percent. Revenues from city fees are expected to rise, too. The combined effect of the tax and fee revenue growth is only to mitigate the loss of $22.7 million in state aid.

Hartford plans to spend $283 million — more than half of the budget — on education. Education spending will stay flat because the city expects to receive Alliance Grants. As the grants grow by $4 to $5 million per year over five years, education spending will rise in the future.

The next highest expenditure category is benefits and insurances, at 14 percent of the budget. This segment of the budget is scheduled to increase more than 22 percent, with pension contributions up $4 million and health insurance costs up nearly $10 million.

Jordan Otero was a summer 2013 Yankee Institute journalism intern. She is a senior studying journalism at Franciscan University of Steubenville. She lives in Southington.