City council has approved a $7.8 billion operating budget, which means taxpayers will see a 3.8 per cent property tax increase.

The hike, almost double the rate of inflation, will cost homeowners about $80. The increase will raise $45 million for the city.

Council voted 31-12 on Monday afternoon in favour of the budget. Councillors who supported the plan said the tax hike was unfortunate, but necessary, because the city is strapped for cash and is not receiving enough money from the province for social programs.

Councillors who opposed the budget, however, said the city's big spending and the lack of a long-term funding plan is putting Toronto down the path towards bankruptcy.

Councillor Rob Ford presented 45 motions for ways to trim about $100 million from the nearly $8 billion budget, but they were all defeated.

Some of Ford's ideas included reducing the mayor's budget, eliminating free golf passes for councillors and staff and axing perks for councillors, such as subscription for newspapers books and magazines, admission and parking at the Ex and Toronto Zoo passes.

The property tax increase has been three per cent since 2003.

Mayor David Miller campaigned to try and keep any increases at the rate of inflation, but he said that was not possible this year because the Ontario government isn't paying its fair share for various social programs.

The city is taking the province to court for $71 million it says it is owed.

Toronto will continue to dip into its reserve fund. The fund contained $1.3 billion in 2001, but only $24 million of that remains.

Toronto's property tax increase, however, is modest compared to surrounding suburban municipalities, where taxes have been going up steadily for the past five years.

Homeowners in Pickering will pay 8.7 per cent more, residents in Brampton are seeing a 6.6 per cent rise, and the increase in Newmarket is 6.5 per cent. Vaughan, meanwhile, is facing a 6.2 per cent increase.

With a report from CTV's John Musselman