Toronto councillors sat down Wednesday to debate the budget, but once again their efforts to focus on city business were taken off track by controversy surrounding Mayor Rob Ford.

As Mr. Ford got to his feet in the chamber to deliver a campaign-style speech, his words were overshadowed by news that he is being sued for his alleged connection to a jailhouse assault.

After a daylong debate that included a blowup by the mayor in its opening hour, city council voted 32 to 13 to raise the residential tax rate by 2.23 per cent this year, including a 0.5-per-cent levy for the Scarborough subway extension. It's a move that will translate into a 2.71-per-cent increase once the rate is adjusted to reflect a city policy to reduce commercial and industrial rates. It will add $68.59 to the average residential tax bill.

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The tax debate was emotionally charged from the start because of the duelling interests of Mr. Ford and Deputy Mayor Norm Kelly. Most of the mayor's authority was shifted to the deputy mayor by council in November after Mr. Ford admitted to smoking crack cocaine.

Mr. Kelly recommended the 2.23-per-cent tax increase, while Mr. Ford pushed for a 1.75-per-cent rise, including the subway levy.

By late afternoon, news began to circulate in the council chamber of the lawsuit that alleges a former football player coached by Mr. Ford carried out a vicious jailhouse beating to silence the former common-law spouse of Mr. Ford's sister on issues surrounding the mayor's drug and alcohol use.

Despite the turmoil that has surrounded Mr. Ford and the new accusations, he emerged from his office after the vote to say the tax increase marked a low point in his time in office. "It's probably the worst day since I've been mayor down here at City Hall because the people have been hurt so bad," he said.

Mr. Ford said the budget, the last before the election, would never have happened under his watch.

"They want to spend like drunken sailors. You know what? That's what happens when I'm not in charge. The gravy train's back and running full steam ahead at City Hall."

Councillor Michael Thompson, who backed the 2.23-per-cent increase, noted that without the subway levy, it would be lower than the 2-per-cent hike approved last year.

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Mr. Ford's latest troubles, he said, were a distraction from the budget debate, but council "adjusted" and is "soldiering on."

He added: "Just when you think everything is fine, something else comes out."

Councillor Gloria Lindsay Luby, who voted against the tax increase because of the subway levy, called the latest allegations "just another shocker," and said her residents are tired of the sideshow. "We are setting a $10-billion budget for the biggest city in Canada, and yet our attention is being diverted," she said.

As Mr. Ford left the chamber after his speech, so too did most reporters, chasing him to get a comment on the allegations contained in a suit filed Wednesday.

Before the news broke, Mr. Ford met with his criminal lawyer in his office, returning to the chamber 45 minutes late from lunch. In the chamber, he discussed a pool on this weekend's Superbowl and autographed head shots of himself.

Mr. Kelly said it is troubling that the latest allegation "seems to point once again to [Mr. Ford's] relationship with people in the city that seem to lead lives outside of the law."

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He noted council did do city business despite the latest accusation.