HAMILTON — The city will spend nearly $3 million less out of the general fund next year, but city officials said more cuts will be necessary to balance the budget.

That’s the financial reality for the city as the finance department predicts that revenue levels will continue to decline from state and local tax sources.

City Council Wednesday night unanimously approved next year’s spending plan. For the general fund, total expenditures will be about $43 million, or 6.3 percent less than this year, and total revenues will be about $40.5 million, according to city records. Though some union employees will receive raises, nonunion employees’ salaries will not increase for the fifth consecutive year, city officials said.

General fund revenue is projected to decline by more than $8 million from this year to next. Most of that reduction is because of the unusually large inheritance tax settlement the city received this year.

The city got about $6 million more than was expected, and that saved the city from making drastic cuts this year, said Hamilton Finance Director Peg Bradner Hancock. The inheritance tax cannot be counted on in 2013 because state law has eliminated the estate tax, Hancock said.

Cost reductions were achieved through decreased health insurance benefits and other various cuts, including police staffing, $199,335, and fire services, $1.1 million (fire savings includes revenue from SAFER grant).

General fund expenditures can be divided into seven categories:

* $29.1 million: 68 percent of the budget goes to fire, police, medical services and municipal court;

* $8.1 million: 19 percent goes to City Council and city clerk, departments of finance, law and city manager’s office, tax refunds and special appropriations;

* $1.5 million: 3.5 percent goes to public works, engineering, public infrastructure maintenance $1.1 million: 2.6 percent goes to construction services, planning, Community Development Block Grants and Fair Housing;

* $1.1 million: 2.6 percent goes to parks and recreation, playground and other outdoor programs, Booker T. Washington Community and M.J. Colligan centers;

* $1.05 million: 2.5 percent goes to the Health Department;

* $962,500: 2.2 percent goes to fund transfers and other purposes.

Contact this reporter at (513) 696-4542 or rwilson@coxohio.com.