Property taxes in Sudbury are set to go up by about the cost of a tank of gas.

City council voted unanimously last night to hike taxes by an extra $60-70 for most residents, or 2.8 per cent.

To do so, council committed to belt-tightening that will go on long after the budget is passed.

Greater Sudbury is getting about $2.5 million less than expected from the province. The gap is being filled by dipping into the city's reserves and betting that tax dollars keep rolling in from new retail and housing developments.

Greater Sudbury Mayor Marianne Matichuk (CBC)

Mayor Marianne Matichuk, who is perenially cost-conscious, is not nervous about spending money the city doesn't have.

"I'm not scared when I saw those numbers,” Matichuk said. “I'm not scared at all. I mean, really? We've done well. We've actually made money."

Last year, Matichuk scolded council and staff for hiking taxes by 3.5 per cent. This year, she was pleased by what she called a team effort.

Provincial grants declining

"People are talking the talk that I started last year and making sure we're doing the right thing for our citizens,” she said.

The city’s belt-tightening plan includes saving $500,000 by not replacing certain city workers.

Matichuk said that won't be tough, as the average employee makes $77,000 a year.

"You start putting in benefits and all that stuff [and you] could be looking at $100,000 per employee. That's five employees — or two really expensive ones."

Chief financial officer Lorella Hayes warned that provincial transfer payments will likely get lighter and lighter.

"It's wise for use to assume continued declines in those grants."

Hayes said to prepare for future budgets, staff are now hunting for another $4.5 million worth of employees and programs the city can do without.

The city budget will not be official until voted on at the regular council meeting next week.