Municipal staff are considering two different forms of tax increases to help make up HRM’s $30.4-million budget shortfall.

On Tuesday, Halifax regional council directed staff to balance the 2010-11 budget through three different methods — a $6-million general tax increase, $14 million in departmental budget cuts and an increase on transit rate fees accounting for $10 million.

According to Paul Fleming, HRM’s manager of budget and financial analysis, the transit rate fees are essentially a form of property tax. In order to pay for expanded transit services, council separated the cost of transit from the tax rate and established it as an area rate.

There are two categories for this — a regional rate that all citizens pay, and a local rate those within one kilometre of a bus route pay.

At Tuesday’s council meeting, staff presented figures under the assumption $10 million in transit rate increases and $10 million in tax increases would be used to balance the books.

Under this formula, homeowners who pay the local rate would have seen a 5.5 per cent increase in taxes, or about $83 per year. The regional rate would increase by 3.7 per cent, or about $65.

Under the new division council suggested, homeowners can expect to pay slightly less, Fleming noted.

Fleming also said he understands increased taxes may be unpalatable for citizens, but HRM has reached a point where some tax increase is required to maintain the service standards people come to expect.