Tension and frustration marked the Oak Bluffs annual town meeting which ran for two nights this week but is still far from over, as voters struggle to come to terms with the fact that their town is on the ropes financially and facing a budget deficit for a third year running.

The annual town meeting will resume on May 4.

On Tuesday and Wednesday night this week voters spent hours debating a series of Proposition 2 1/2 override questions that had been placed on the warrant, but the discussion would become moot when all but one of the questions was defeated at the ballot box yesterday. Some of the questions were meant to restore service and personnel cuts made at a special town meeting last fall.

On Tuesday moderator Dave Richardson set the tone when he went to record the first vote and realized that many people had not been given a yellow voting card. “There really is a financial crisis in this town,” he quipped, but few were laughing among the 273 voters at the regional high school Performing Arts Center.

Faced with a series of difficult financial decisions, beginning with a $24.7 million operating budget and 12 override questions that would permanently add another $647,000 to the town tax levy, voters were not in a joking mood. This was evident when they took up a pair of tax increase questions, one to hike the meals tax and another to boost hotel taxes in town.

Gambling on the assumption voters would approve the new taxes, selectmen had used $200,000 in anticipated revenue from the meals tax and $100,000 from the increased hotel tax to balance the budget. But the gamble failed to pay off when voters approved the meals tax increase but rejected the hotel tax hike.

Doug Abdelnour, owner of Nancy’s Snack Bar, argued against the meals tax increase, noting that none of the other Island towns were planning to adopt the extra tax this year and worrying it might drive customers out of town. “This sort of scares me, why would we want to do anything to send people into Edgartown or Vineyard Haven?” he said.

Former selectman Todd Rebello said officials should not try to balance the budget on the backs of restaurants.

“I appreciate that state revenues are down, but I think revenues for everyone in this room are down too. I haven’t seen any cuts, and I haven’t seen any difficult decisions. This seems like another example of tax and spend . . . the buck has to stop here tonight in this room,” Mr. Rebello said.

Selectman Kerry Scott also argued against the new tax. “We didn’t go out and do our homework. We didn’t build consensus on this. And as a member of the board of selectman I am deeply sorry we didn’t do a better job of it,” she said.

But selectman Duncan Ross urged voters to consider the benefits.

“The bottom line ladies and gentleman is that revenue is down and the state has given us this opportunity to raise this money . . . if we don’t generate the money here, then cuts will need to be made elsewhere.” he said.

Selectman Gregory Coogan also took the microphone to support the tax.

“From our standpoint we felt that a majority of this money is coming from people who come to visit us. They come over in the summer on the boat and they spend a few nights, they have some meals, and we provide a beautiful town to them. This is a way for them to help us in a time of need,” he said adding:

“And to say we haven’t cut taxes or tighten our belts — please. You know we have. We’ve had to cut back on state revenue and we’ve had cutbacks across the board and dramatic cuts to service.”

The increased meals tax was approved 145-115.

Discussion then turned to the rooms tax hike. Oak Bluffs Inn owner Erik Albert urged voters to turn it down, saying higher taxes have already forced many inns and hotels in town to convert to weekly rentals which are not taxed as lodging establishments.

“They’re not paying taxes, which puts us at a big disadvantage. If I turned my house into a weekly rental, I wouldn’t have to pay anything either. Essentially you are just [using this tax] to catch up on revenue you’re missing,” Mr. Albert said.

Douglas Siple said the extra tax would turn the Island into a place like New York city or Hilton Head island.

“We can keep introducing rooms taxes and driving people away; we are already doing a good enough job driving away people who live here. Or we can stop somewhere and take financial responsibility for what we do,” he said, drawing applause.

Mr. Coogan again took the floor.

“I have heard a lot of exaggeration about things that aren’t substantiated, like comparisons to New York city and such — and I think it’s unjust. Let’s not be swayed tonight be exaggerations,” he said.

The hotel tax hike was defeated 172-102.

The special town meeting finished just after 9 p.m. and the annual meeting began.

Voters adopted a compensation and classification schedule with a three per cent step raise for town employees not covered by collective bargaining agreements. Then came the operating budget, and Mr. Richardson paused for reflection.

“I feel like someone who looks up at the high-jump bar and realizes its about six feet too high,” he said.

Before they took up the budget, voters skipped ahead to an override article to cover annual stipends for elected officials, including town moderator. Mr. Richardson volunteered to give up his stipend, but asked voters to be kind to others.

“Be thoughtful of what you do. The extent of my work is three nights a year. But some of these committee members work five nights a week. All the marbles in the bag are not the same size,” he said.

But this was a night for cost cutting, and all the stipends were eliminated, except for the selectmen and constables. The cuts will save the town $17,500 next year. Later voters also eliminated stipends for the assessors, saving another $5,000.

With the business of the budget at hand, voters singled out 24 separate department line items for further debate. They got through three and the meeting was recessed just before 11 p.m.

On Wednesday night town administrator Michael Dutton started off by unveiling a series of cost-cutting measures to make up the shortfall created the night before when the rooms tax was shot down.

The Dutton plan eliminated a $2,230 pay increase for the town clerk, $30,000 in post retirement benefits for employees, $25,000 for a master plan and $15,000 for the information booth run by the Friends of Oak Bluffs. It also cut $11,868 from the Oak Bluffs School residential placement program.

Renee Balter, a longtime business leader in town, pleaded with voters to keep the money for the information booth.

“Each year people who run that booth, our friendly ambassadors, talk to people in a friendly and connecting manner. It makes them feel welcome, it makes them feel comfortable and it makes them come back,” she said.

Voters were persuaded and the $15,000 was saved.

John Bradford, chairman of the planning board, made a similar plea to save funding for the master plan, but was unsuccessful.

Again on Wednesday the central point of contention — and confusion — was the 12 override questions placed on the warrant.

Charlie Minor suggested lumping them all together and voting them down.

“I’d like to urge the town meeting to save the voters the trouble of agonizing over all of these . . . if the town was able to find money for three per cent salary increases . . . they could have found the time and the money to fund these things instead of putting them [as questions] for voters,” he said.

But voters disagreed and began the work of taking up the questions one at a time.

A request to restore $27,286 to the assessors salary line item cut during the special town meeting last fall was approved following a plea from assessor Melanie Bilodeau. “I’m not talking about just cutting back services here. I am talking about not being able to get the tax bills out on time,” she said.

Also approved was a request to restore $96,980 to the police department budget, following pleas from police chief Erik Blake and officer Jeff Trudeau.

“I think this is an issue of public safety,” Mr. Trudeau said. “We are currently one of the most proactive police departments on the Island, we take pride in that. But if we go to minimal staffing we will be a reactive police department. And we will not provide the service we are capable of.”

Voters also agreed to pay $7,000 as the town share for the Martha’s Vineyard Drug Task Force.

By this time the hour was late (10:30 p.m.) and the bulk of the override questions remained. Mr. Richardson asked whether voters wanted a recess.

Margaret A. Stafursky, a member of the board of registrars, moved for the override questions to be lumped together and voted on as one, so voters would know what would had passed at town meeting when they went to the polls the next day. The motion was defeated.

As many voters headed for the door, perhaps thinking a recess had been called, seven voters stood to challenge the previous ruling. Mr. Richardson recognized the seven and asked people to return to their seats, calling on constables to go outside and round up voters from the parking lot.

The moderator then called for another vote.

There was more confusion.

“Aren’t we adjourned?” asked finance committee member Arthur W. McGrath Jr.

Mr. Richardson said no, and called again for a vote, first on the motion to lump the remaining articles together, then on the consolidated article. Both were approved.

More voters headed for the door.

“What just happened?” one voter asked

The town meeting will reconvene on May 4 at 7 p.m. at the Oak Bluffs School.