Taxpayers in the Winnipeg School Division area may see a 5.89 per cent increase in their property taxes after the division finalized its final 2016-17 budget Monday night.

The increase equals $74 a year for an average residential home valued at $203,900, said a news release from the school division.

Earlier this month, Winnipeg School Division board chair Mark Wasyliw told CBC the finance committee had to shave away at the budget to bring the tax increase down from 6.4 per cent to 5.89.

"In light of an inadequate funding model that doesn't lend itself to stable and predictable funding, we had our work cut out for us with this budget," Wasyliw said in a news release.

The division was hit with a $5.5-million budget shortfall earlier this month when an unprecedented number of commercial property owners downtown appealed their property tax assessments and effectively reduced the division's tax base by $158.6 million, according to the division.

"We consulted with the community on a draft budget that had very few additions but would maintain existing programs and services, in order to ease the residential tax burden," the division's finance committee chair Chris Broughton said in a news release.

"To defer a larger increase and focusing on the need for quality education in the face of declining provincial investment, we have applied $587,800 from reserve."

The $396 million budget protects programs that respond to community need in early years education, math and services to improve graduation rates, Wasyliw said in a news release.