City council passed the 2012 budget on Tuesday night as several hundred protesters surrounded the entrance to Toronto's city hall.

The balanced 2012 operating budget was passed 39-5, with Mayor Rob Ford and Coun. Doug Ford voting against it.

Coun. Josh Matlow called the budget a "responsible and compassionate budget" in a press release.

Some of the services and programs protected by the amended budget include $5 million to the TTC to help prevent service cuts, $3.9 million to prevent proposed cuts to libraries and $670,000 to restore childcare centre programming.

Mike Del Grande, budget committee chairperson, said that the budget marks a turning point in the city's history.

"While not there just yet, the city is beginning to secure predictable, sustainable revenue sources to fund everyday expenses," he said in a press release.

Despite voting against the amended budget, Mayor Ford called it a "huge victory."

"I saved the taxpayers $140 million, how can you say we lost," he said at a press conference on Tuesday night.

Up to 1,000 people stood at the entrance around 6:30 p.m. to protest spending cuts, as dozens of police officers kept watch.

Four men in their 20s were arrested and charged with obstructing a peace officer, unlawful assembly and mischief by interfering with property.

Earlier on Tuesday, council approved a 2.5 per cent property tax increase. The residential tax increase translates to an increase of $60 for the average homeowner.

Council voted in favour of the tax hike – one of the major changes in a plan that also includes job losses, fare hikes and service cuts.

The budget also includes a 0.83 per cent tax increase for businesses and a 10-cent fare increase for TTC customers.

Some councillors suggested implementing a higher property tax increase, but Toronto Mayor Rob Ford said Torontonians could not afford "a penny more" than a 2.5 per cent jump.

Library funding and pool closures were among the adjustments drawing the ire of several groups, including healthcare professionals and parents.