By a vote of 33 to 18, the city council Thursday raised the city’s property tax rate by seven percent, adding an average of $118 to the property tax bill of single family homeowners.

Council members in favor of the hike defended the move, saying it was a responsible act given the city’s worsening fiscal outlook and said it will save services.

“The choices we have are not good ones. The decisions we are going to make today are tough ones. But I believe the actions that the finance committee took, council will take are the right ones to keep the city moving forward,” said City Council Speaker Christine Quinn.

But those opposed argue the tax hike will price New Yorkers out of the city and worsen the foreclosure crisis.

“We can’t tax ourselves out of an economic downturn. However, we continue with these follies,” said City Councilman Vincent Ignizio.

Others called for taxing wealthy New Yorkers at a higher rate and suggested tapping the city’s health care trust fund to avert the tax increase.

“You want to save that for a rainy day, well it’s pouring already,” said City Councilman Charles Barron.

Most homeowners will get a reprieve in the form of a $400 property tax rebate check that the mayor has agreed to put in the mail, after withholding it for weeks. Checks are expected to arrive in mailboxes by the end of the year.

The mid-year budget deal also includes a nearly one percent hike in the city’s hotel tax and forces the city, after initially canceling a police training class, to hire 500 new cadets next year.

Mayor Bloomberg, in a statement, said the council’s actions were necessary and notes that the city will not repeat the mistakes of the 1970′s.

Council members said they ultimately decided to support the tax increase after the fall brought nothing but more bad news on the economy.

With the city’s financial outlook no more bright over the next few months, there’s likely to be more difficult decisions ahead.

Source: NY1