Toronto Mayor David Miller, seen in this file photo, released a 2009 operating budget on Tuesday that includes a four per cent increase in property taxes. (The Canadian Press)

Toronto homeowners will be paying higher property taxes next year as the city tries to cope with a dimming economic picture, growing unemployment and higher welfare rolls.

On Tuesday, Mayor David Miller released the 2009 operating budget at what he termed "a critical time for our city."

The $8.7-billion budget includes a hefty four per cent increase in the taxes paid by homeowners.

"We must protect the services and programs our residents and businesses have come to rely upon. This is especially important during a period of worldwide economic instability when our community will need city programs more than ever," Miller said in a prepared statement released with budget documents.

The property tax increase will raise $83 million for city coffers. It means a home worth $400,000 will see a tax increase of $100.

Some property owners say the increase is too much, especially when added to all the other fees.

Andres Lean, who owns several properties in Toronto, says he feels "taxed out."

"I just paid my annual licence plates and paid a $60 increase on the vehicle tax on top of the licence plates. So I'm wondering, do we always have to pay increased taxes on everything?"

The $60 vehicle tax and the land transfer tax were both brought in to help balance the 2008 budget — and both were highly contentious.

The land transfer tax was supposed to raise $240 million when fully implemented, but critics say the downturn in the Toronto real estate market will seriously erode that figure.

Neither fee has been increased in the 2009 budget.

But user fees, which make up 15 per cent of the city's revenues, are going up.

The cost of taking a city-run program or renting a city-run facility will cost about 3.7 per cent more, and is expected to bring in $396.3 million in extra revenue.

The city says its review process identified more than $100 million in savings from "internal efficiencies and continuous improvement efforts by the city." That money has gone to offset the 2009 budget increases.

Miller's statement did not specifically say TTC fares would not be going up in 2009.

The statement said simply the city is "considering a freeze of TTC fares, development charges and waste collection fees in 2009."

City councillor and budget committee member Joe Mihevc says without the extra money services would have to be cut.

"It would be great to say you can have all those services and not have to pay for them," said Mihevc.

"However, they need to be paid for — and our primary source of revenue is, of course, the property tax system. Will people be ticked off? I don't think so. I think the thoughtful person will recognize the kind of tensions we're trying to hold together with this budget."