The amount approved is about $14.5 million less than would be needed to fund the same size government as this year, said Cheryl Frasca, director of the city Office of Management and Budget.
The 2011 budget is an increase of about $14 million over this year's.
But the final version eased up on some cutbacks that Mayor Dan Sullivan's administration initially proposed two months ago.
The less severe cuts came thanks to a decision by the Assembly last month to increase tobacco taxes by $5.7 million annually beginning in January.
With the anticipated new tobacco tax money, the administration agreed to restore $3.2 million in programs and services that had been slated for cuts. The Assembly added back in about another $335,000 in spending in amendments Tuesday night.
The rest of the tobacco tax increase is to offset property taxes.
The amendments approved put into the budget:
• $250,000 to keep People Mover bus service nearly the same as this year, instead of eliminating some peak runs and late-night and early morning runs. This proposal, by Assembly member Patrick Flynn, passed 6-5. One route, 45G to Mountain View, will still be cut.
The rescued runs, said Flynn, "provide essential services for people trying to get to work,"
• $85,000 for an East Anchorage neighborhood plan.
But the Assembly turned back a proposal by Flynn to add back $384,000 to save the Dimond Center public library branch from closure.
The property tax increase is the lowest one in years.
Frasca said the taxes will be about $8.3 million less than the maximum increase allowable under the municipal tax cap.
A wide range of fees, from swimming pool fees to dumping charges at the landfill, are scheduled to increase next year.
And some positions will be eliminated, including some vacant police officer jobs.
Sullivan said even after cuts in 2011, he sees a double digit shortfall in 2012. He promised to "leave no stone unturned" to make government operate more efficiently.
Before they passed the budget, several Assembly members said they felt the process had gone smoothly.
Chris Birch said he is disappointed unions did not make concessions to lower the costs of government, as Sullivan asked them to. The mayor asked for a wage freeze next year, and cancellation of a bonus program.
Ernie Hall said Anchorage residents are not overtaxed. "Absolutely not." But he said he was pleased with the lean budget approved because people are struggling in this economy.
