A handful of city councillors say they're concerned about an $86-million hole in Mayor John Tory's proposed city budget.

The problem is the province is pulling off the table money for housing and offering a line of credit to fill the void. Servicing that debt would cost the city about $25 million a year, a situation that leaves some councillors wondering how Tory will make up the difference.

"I'm waiting to see what this plan-B is," said Coun. Janet Davis. "If it's going to include cuts or service reductions, I know that I will not be happy with that."

The situation had Coun. Gord Perks — a left-learning councillor — surprisingly passing praise on previous mayor Rob Ford.

"With mayor Ford, all of the budgets brought to council were balanced... I didn't agree with them, but they were balanced. Without fixing the problem, what this means is we're going to have to suffer through this punch every year."

City manager Joe Pennachetti admits the situation isn't ideal.  

"Is it something that we prefer? Of course not," he told CBC News.

The budget tabled Tuesday includes a 2.75 per cent property tax increase, a total that includes a .5 per cent levy to expand the subway into Scarborough. The budget also includes new funding to enhance TTC service.

Tory has said he won't scale back new TTC spending or opt for a larger property tax increase.

"Now I'm going to devote my energies … to finding the money that we need to make up this year's portion of that $86 million," he said.

Tory has said he will have more to say next week about how the shortfall will be addressed.

With files from CBC's Jamie Strashin