City budget chief Shelley Carroll warns that taxes may have to go up in line with inflation to continue delivering services to Toronto residents.
"We don't want to cut a service that residents rely on and we also don't want to needlessly be cutting jobs," she said Tuesday.
Mayor David Miller has said it's likely that property taxes will likely rise between two and four per cent.
The city says high fuel bills have driven up costs this year, and union negotiations with civic workers could be costly. The city is also waiting for provincial funding dollars to arrive.
The city is looking for about $175 million in savings.
Councillor Denzil Minnan Wong said city council should be looking for more ways to cut costs.
"A lot of families are going to be looking at their budgets. We've got to look at ours," he said. "We've got to assess what our priorities are and get back to basics before spending money on frills."
A few people questioned by CTV Toronto expressed concern the city would be considering raising taxes with economic heavy water on the horizon.
"It's exactly the wrong time to be putting new costs on individuals, families and businesses," said Kevin Gaudet of the Canadian Taxpayers Federation. "It sends the wrong message. Instead, governments should be leading by example and demonstrating fiscal restraint instead of asking for more money."
Other people expressed discomfort with the idea of another tax hike.
Even Premier Dalton McGuinty said cities should be cautious about raising taxes at this time.
Miller has argued that Toronto's taxes are among the lowest in the GTA. He has asked city departments to scale back spending by about two per cent to accommodate anticipated wage settlements and to keep operating spending in 2009 in line with this year's spending.
The city will unveil its capital budget on Oct. 30, with a vote scheduled for December. Talks about the operating budget won't begin until early in 2009.
With a report from CTV Toronto's Naomi Parness
