Rising insurance, fuel, utility and debt service costs are posing a daunting challenge in balancing the proposed City of Gaffney budget, administrator James Taylor told his council Monday.

"If we held the line on expenditures, we'd still have increases in expenses larger than the increase in revenue," Taylor said.

The result is about a $380,000 shortfall.

Taylor recommended council consider four options to narrow the gap, including shopping for lower insurance and workman's compensation rates, negotiating lower utility costs from the Gaffney Board of Public Works, instituting fuel saving measures and freezing some positions.

Apparently one cost-cutting measure council won't consider is rescinding the hefty pay raise it passed last year that boosted each council member's salary from $6,728 to $9,288. Mayor Henry Jolly's

salary increased by $3,000 to $11,765. The raises go into effect after the August municipal election.

Taylor said the raises are funded in the proposed budget. Although the budget is still a work in progress, Taylor said employee salaries have yet to be discussed.

Last year, council approved a 7.4 percent tax hike that raised the millage from 107.9 to 115.9.

The increase meant that an owner of a $100,000 home paid $32 more in taxes this year.