Halifax finance officials are proposing program cuts, fee hikes and a tax rate increase to deal with a projected $30-million budget shortfall.

Costs are up and revenues are down in the Halifax Regional Municipality, councillors were told Tuesday.

"We've got a challenge right now to deal with that's partially caused by expansion in services, a little bit caused by the economic downturn, but more a difficulty caused by the fact of the assessment cap," said Cathie O'Toole, the HRM's director of finance.

The proposed solution involves cutting between $7 million and $10 million in services and programs, but sparing the transit service. Fees would also go up and the tax rate would climb by three to four per cent.

Coun. Steve Streatch isn't satisfied. He prefers to see $20 million in cuts and no increases in the tax rate.

"I think we need to cut more than that," Streatch said. "I know that maybe means layoffs and it maybe means pulling back and circling the wagons and reorganizing so that people maybe have to do a little more and some of the dead weight moves on."

Regional councillors will continue to debate the various budget options next week.

The 2010-2011 operating budget is scheduled to be tabled in early April, but there may be a delay if council asks for a dramatically different solution to the municipality's money woes.