In a speech on Tuesday to the Dorchester Board of Trade, Mayor Thomas Menino previewed the budget he plans to submit to the City Council in April, vowing that police staffing levels will be maintained and school funding will be increased, even as the city's schools struggle with a wide deficit and, in some cases, under-enrollment. School closings would not be considered until late next year, he added.

In his annual luncheon speech before Dorchester merchants, Menino also pointed to the planned reconstruction of Dorchester Avenue, stretching from Lower Mills to Andrew Square, a project that had its price tag boosted by an additional $7 million to $12 million.

"The price of everything is going up in our world," he said, pointing to a rise in the price of a sack of flour to $37.50 from $7. "You make a budget. You make it work."

The city will get some new revenues, thanks to a recent decision the state Appellate Tax Board handed down earlier this month, allowing cities and towns to tax telephone wires and poles in public areas.

That will bring in an additional $7.5 million, Menino said, who has previously said that will be used for tax relief.

Menino also ratcheted up criticism against state lawmakers, who have balked at approving the taxing of telephone wires and poles in legislation filed by Gov. Deval Patrick.

"They walked away on this legislation," Menino said. "They will not deal with it."

Menino cheered $64 million in improvements for current capital plans in Dorchester, prompting applause from the small crowd assembled at the Venezia restaurant in the Port Norfolk neighborhood.

"We have a lot to be proud of, we have a lot to look forward to," he said.

That includes the Dorchester Avenue Project, which will rebuild three major intersections, including Glover's Corner, Fields Corner and Andrew Square. The entire avenue will receive improvements, and a total of ten intersections will have dedicated left-hand turning lanes and synchronized traffic lights.

The project is due to start in spring 2009.

City Council President Maureen Feeney said the project, long in the works, will make Dorchester more "user friendly."

"We understand it does make a difference how traffic flows," Feeney said.

Previous projects have addressed the avenue in sections, she said.

"This will be the first time, since it's been built, from the beginning to the end going into South Boston," she added.

Oscar Moreno, the Codman Square branch manager of Mt. Washington Bank, said the mayor's plan will help with the revitalization needed on the main street.

"I think the mayor's doing as much as he can to clean up the streets," he said, but adding that there are also small business off of the main streets who need attention, too.

After Menino's speech, Feeney raised the question of the city's schools, which are struggling with a $30 million deficit.

"The classroom, for the most part, has not been touched," Menino said. Menino aides added later that half the budget gap has been closed through central office cuts.

Feeney said she was satisfied by Menino's answer. The school committee will be looking at every facet of its budget, but no drastic closings will occur in the 2008-2009 school year, she said.

"That is not the approach we're taking," she said.