City councillors in St. John's have approved a $204-million budget that will result in residents paying more taxes in 2010.

In a vote Monday, the council lowered its residential mil rate, the formula used to calculate property taxes, from 11 to 10.1; however, the decrease isn't enough to counter large increases in property assessments.

Property assessments have jumped an average of 20 per cent in St. John's. They were released right in the middle of September's municipal election campaign.

Deputy Mayor Shannie Duff said councillors' campaign promises played a big role in the city's budget. "It's the first time in my experience we have ever had ... people's campaign promises seemingly dictating what we would do about a budget," she said.

"That never entered into it before. I think that if we hadn't had that hitting at the door with people very angry about the assessment, I think the whole thing may have been different."

Coun. Tom Hann warns the city has to find other ways to bring in money. "There is only so much the ordinary taxpayer can sustain," he said. "We have to look at other sources of revenue, and the only other source of revenue is development."

Some older residents will get a break in the 2010 budget. Senior citizens who qualify for the guaranteed income supplement will see their discount on property taxes increase from 15 per cent to 20 per cent.

The blueprint for spending next year also included an increase in the water tax of $50, raising the annual cost to $570. Budget documents said the extra money is needed to help pay for the new sewage treatment plant on the south side of the city's harbour.