PHILADELPHIA (Reuters) - A controversial proposal to tax soft drinks did not make into a list of measures approved late on Thursday by Philadelphia’s city council to balance the city’s fiscal 2011 budget.

To offset revenue that would have been raised by the soda tax, the council approved a 9.9 percent increase in the city’s property tax, a doubling of commercial trash-collection fees, and a new fee on smokeless tobacco.

The budget package would leave a fund balance -- a cash cushion for unforeseen events like emergency snow clearance -- $15 million short of where it should be, and that’s a risky proposition, said Doug Oliver, a spokesman for Mayor Michael Nutter.

Like many U.S. cities and states, Philadelphia has been hit hard by the recession, which has hurt revenue and bumped up welfare costs, forcing officials to find ways to cut back.

A months-long budget impasse in 2009 led major ratings agencies to cut the city’s ratings close to junk status.

The planned two-cents-an-ounce soda tax, which was strongly opposed by the beverage industry since it was announced in March, would have raised $77 million to help plug a $150 million gap in the coming year’s $3.9 billion budget.

If it had been implemented at the full level, the tax would be the highest in the United States Some other cities have soda taxes but at lower levels, Oliver said.

The tax was promoted by the Nutter administration as a way of reducing soft drink consumption in a city where half the children are overweight or obese.

Oliver said the administration would continue to press the council to adopt the tax, albeit at a lower level, during budget talks leading up to final votes over the next two weeks.

“If it does find a way to survive, it would likely be at a reduced amount,” he said.

The property tax increase would raise $86.2 million; the higher commercial trash fee $7 million, and the smokeless tobacco tax $4 million.

The council’s budget package includes $17 million in spending cuts.