SARATOGA SPRINGS — Teachers in the city school district will be getting raises of 4.5 percent, 3.9 percent and 3.98 percent over the next three years, according to a new contract approved Tuesday by the Board of Education.

The new package, which is the result of 11 months of negotiations between school officials and the Saratoga Springs Teachers Association, sets salary increases at 1.45 percent for the current school year, 1.14 percent for 2009-10 school year and 1.39 percent for the 2010-11 school year, exclusive of earlier negotiated step increases.

There are 585 teachers in the enlarged city school district which includes all of Saratoga Springs, large parts of the towns of Wilton and Greenfield and smaller parts of the towns of Saratoga, Malta and Milton.

Superintendent of Schools Janice White and Walter Jennings, president of the teachers association, each described the new contract as a fair one.

Jennings said negotiations took longer than expected but there was no animosity or major disagreements during the process.

“We are not blind to the realities of the day, to the tough times ahead of us,” said Frank Palumbo, school board president.

He said the teachers and district representatives worked together in a “thorough and well intentioned process” to arrive at a contract that benefits the district, the students and the teachers.

District officials said the negotiated salary increases total $597,000 for the 2008-09 school year, which represents about one-half of one percent of the total district budget of $107.3 million.

White said the contract allows the school district to “remain competitive” in the marketplace for new teachers. Under the new contract, the starting salary for a beginning teacher with a master’s degree in September 2009 will be $40,279 as compared to about $38,000 this fall.

Jennings said the teachers also felt this recruitment issue of a higher starting salary was important because the city school district has one of the lower starting salaries in the Suburban Council.

The teachers are contributing 11 percent, rather than the earlier 10 percent, for health insurance premiums under the contract. The contract continues the $300/$500 deductibles established in the previous contract and the requirement that teachers hired after July 1, 1995 (62 percent of the district’s teachers) have only 50 percent of their individual health insurance premiums paid by the school district in retirement, according to a district statement on the new contract.

The Board of Education on Tuesday unanimously approved the three-year contract, which runs from July 1 of this year through June 30, 2011.

Palumbo said the Board of Education is “acutely aware of the governor’s proposed cuts in state aid funding, and, as we have in the past, will continue to work with the administration and teachers to meet these serious challenges.”

“Collectively, we will develop a budget plan [for the 2009-10 year] going forward that is both fiscally prudent and sustains our academic excellence,” Palumbo said in a statement.

The school board also approved raising the amount senior citizens, 65 years or older, can make and still qualify for up to a 50 percent tax exemption on school taxes.

The board raised the income ceiling from $32,400 to the state maximum of $37,400. The exemptions, which must be applied for by seniors, are based on a sliding scale with seniors having an income of $29,000 or less getting a 50 percent reduction on the assessed value of their property. The larger the annual income of a senior citizen, the less of a percentage reduction.

The application forms and information about the senior citizen tax exemption are available at district administrative offices off West Circular Street and by visiting the district Web site: www.saratogaschools.org.