The Manassas City Council has approved a $32.8 million budget for the coming fiscal year that will lower the real estate tax rate by 3 cents. But property owners can still expect an increase in their tax bills because assessments have gone up an average of 15 percent, according to City Manager C. M. Moyer.

The new tax rate will decrease from $1.23 to $1.20 for each $100 of assessed value.

The new budget provides for a 5 percent cost-of-living raise for city employes and 5 percent merit raises, which come on employes' anniversary dates of employment.

The new budget represents a 24 percent increase over the fiscal 1982 budget, Moyer said. Part of the increase, Moyer said, is due to city contributions to several major county projects. Manassas contributed $1 million, or 20 percent, to the cost of the Prince William County Jail, which opened last April, and has raised $1.9 million for its share of the cost of the new county courthouse.

In addition, the city school board has requested $10.7 million for the construction of a new high school and the renovation of other schools, Moyer said.

"Basically, we did not cut back in any delivery of services to the citizens," Moyer said.