In the wake of a city budget proposing the largest tax increase in more than a decade, city councillers are saying this is the best they could do.

In separate interviews with the Star today, Councillors Jan Stick, Dave Austin and Dave Stockdale have said while the tax hike may not be favourable, it is necessary.

'Costs go up and we have to address those costs,' said Stockdale, a 24-year veteran to city council.

He said in his experience, people are largely forgiving of tax increases.

'We want to maintain the quality of life here. We could cut the snow-clearing in the winter, and we could cut the $1 million or so in grants we give out, but that reduces the quality of life here.'

Austin said the quality of life in Whitehorse is what attracts people to live here, despite higher costs, so the 7.5-per-cent property tax increase in the new $51-million budget is not catastrophic.

'I like that we're finally spending money on infrastructure and new services,' he said. Austin also serves as the president of the Yukon Chamber of Commerce.

His counterpart at the Whitehorse Chamber of Commerce, Rick Karp, said the tax increases are bad news for Whitehorse businesses.

'Other provinces have incentives for businesses to go there,' he said today.

'We're raising the costs of doing business in Whitehorse. That's like putting a big stop sign at the border.'

Austin responded that 'there's a lifestyle here, and that's a big selling feature.'

Karp said the chamber will be meeting next Thursday to prepare an official response to the budget, but initial reactions to it are not good.

Stick, a business owner in Whitehorse, said one item the budget could have left out were the hanging baskets on Main Street, which are slated to cost the city $6,000 per year until 2011.

'I just think it's the responsibility of the business owners to make their storefronts attractive,' she said. 'But that's a little-ticket item.'

Stick said overall, she is pleased with the budget, as proposed.

'Some of the decisions we made, for me anyways ... I am glad we have the focus on sustainability. We've heard that it's important to people, and so we're trying to reflect that.'

Federal gas taxes in the amount of $45 million over seven years will help fund a number of city projects geared toward sustainability, including a $3-million project to install water meters at every home, and to make accessibility upgrades to city hall, the future municipal services building and the Mt. McInytre Recreation Centre, at a cost of $245,000 over three years.

The gas tax will also help fund a number of upgrades to city sewer and water services, including $3.6 million in Selkirk pumphouse improvements.

Stockdale said the sustainability components of the budget make it worthwhile.

'It's our contribution in the fight on global warming,' he said. 'Our efforts in that area have eased my conscience a bit.'

He said knowing that staffing accounts for such a large chunk of city expenses, he initially wondered why the budget included an additional dispatcher for the fire department, another staff member to maintain city vehicles and making an environmental co-ordinator position full-time from part-time.

Indeed, Mayor Bev Buckway said total labour costs for the city are expected to increase by more than $3 million next year.

'But it's safety, you know, with the dispatcher, and we can't have our staff supervisors running around buying car parts, and I guess if the environmental co-ordinator is helping with the sustainability efforts, that makes sense.'

Stockdale said initial talks amongst city councillors and administration had slated a 10-per-cent tax increase, which was not acceptable to most. The 7.5-per-cent hike reflects efforts to trim where possible.

'I don't know what else we could have cut that would reduce the amount all that much,' he said. 'I'm fairly comfortable with it, but we did argue on it.

'I know 7.5 per cent is not good, but costs are going up, and we have a limited source of income.'

A funding summary table included in the proposed budget shows from where city funding stems.

Between 2008 and 2011, the Capital Reserve will pump $13 million into the city to offset spending. The Municipal Rural Infrastructure Fund, or MRIF, will see over $3 million going into city bank accounts over the same three-year period.

The Yukon government currently gives the city about $5 million annually, though this will total $7 million per year at the end of five years.

This money gets spread amongst numerous city reserve funds, including the water and sewage, equipment and environmental reserves.

In spite of all the city's 2007 revenue from the YTG, from sewer and water fee increases from the 2007 budget, $360,000 in investments, $4 million in taxes and $4.2 million in land transactions, the city is still coming up short, necessitating the tax increase, say councillors.

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Tuesday's budget story said the city will move its Municipal Services Building into the old Canadian Tire store.

In fact, the city is entertaining three potential sites, not including the old Canadian Tire outlet, and a decision has not yet been made. The current Municipal Services Building will then be sold off by the city.