Keeping the horse trams would have meant increasing rates by seven pence, Douglas Councillor David Christian has said.
Mr Christian told Manx Radio: ‘You were looking at a seven pence rate increase with a minimum of a four pence rate increase the following year.
‘That’s just in relation to the trams and the building. That doesn’t allow for any other new pressures that may come during the course of the financial year.’
It was announced by Douglas Council last month that the historic trams were to be axed with immediate effect because of the financial burden on ratepayers.
A working party comprising officers from government, the council, Manx National Heritage and Culture Vannin has been established to consider the future of the trams.
Mr Christian added: ‘More devolved services from government, more inflation next year, there are considerable costs out there during the life of this council.
‘For a four year term we’ve reduced expenditure in the council by £1.3million, that’s a hell of a lot of savings but we’ve had £942,000 worth of increased costs for the incinerator put our way as well from central government.’
Mr Christian said that the ratepayers have enough to contend with without the extra cost of the horse trams.
But fellow councillor Stephen Pitts feels the increase would be worthwhile and said: ‘I’d like them to explain the cost on people’s rates bill then say do you want it or not?
‘On an average rates bill of £400 it was calculated as a one and a half per cent increase, which was £6.
‘Everything makes a loss. Summerhill Glen, the gardens on the promenade, the football pitches, golf clubs, the library. We fought for 10 years to keep the Villa Marina when it was making a loss.
‘The library move saved £100,000 in rent but it’s costing £650,000 a year to run it.
‘It’s gone from three levels to two so there will be a reduction in staff shortly making more savings.
‘I don’t mind all this but why couldn’t we have kept the trams for another year while we ask people what they want.’