Pittsburgh City Council members yesterday said they will hike the parking tax to 50 percent to retain employees who otherwise would have been laid off and to restore some services that were cut in the budget they adopted last month.

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In exchange, Mayor Tom Murphy agreed to give up his proposal for higher taxes that would go into effect at midyear and not to veto council's new version of the budget. However, he won't sign it, either, letting it become law without his signature.

Under pressure from community groups, council members said they agreed to increase their budget to $390 million.

With the parking tax increase, $1 of every $3 paid by commuters to park Downtown and in other city business districts will go to city government starting Feb. 1 -- by far the highest parking tax in the nation.

Thirty-one public swimming pools and 19 recreation centers will remain closed, but some 99 municipal workers who would have lost their jobs will stay on the payroll, allowing youth sports and other programs to continue. Twenty-four laid-off police officers will be recalled.

"At best, it'll do," Murphy said of the compromise measure. "It keeps us performing essential services, but we'll be back here in June or July in lieu of outside action on the part of the Legislature or the coordinator under Act 47," the distressed municipalities law.

The agreement ends weeks of budget disputes between Murphy and council that peaked with the $387 million budget council approved in a 5-4 vote New Year's Eve. Murphy had proposed using mid-year wage, property or commuter taxes to balance the budget, but council snubbed him, saying it wanted to rely on "real money" rather than future tax increases.

Council members thought their austere plan, spending $20 million less than Murphy's proposal, would lay off only nine employees.

But Murphy showed that 99 full- and part-time workers would be cut, exterminating such popular programs as Big League youth sports, the Oliver Bath House indoor pool and the Mellon Park tennis bubble. He also said police would not be rehired, because council had counted on saving $1.2 million extra on police salaries.

Under pressure from police, sports enthusiasts and the administration, council President Gene Ricciardi led an effort over the weekend to backpedal from some of the cuts.

The latest changes are necessary to "to continue to provide essential city services," Ricciardi said yesterday.

"We may have, without intending to, cut some essential positions," said Alan Hertzberg, who Ricciardi appointed as council's budget chairman five days after the New Year's Eve vote.

Council is expected to introduce the budget amendments today and give them final approval in a series of votes tomorrow. Though council members yesterday described the budget as still being austere, the reductions are largely illusory.

The $390 million budget is $17 million less than Murphy's last $407 million plan. The differences include $8 million in personnel costs transferred to another budget; $4 million from so-far unapproved mergers with Allegheny County; $2 million from liquidating trust funds; $1.8 million in reduced salaries; and $1.2 million in increased savings estimates citywide.

On the revenue side of the ledger, Murphy let stand $6 million in increased payments expected from city agencies, though his administration said the payments will only increase by $1.5 million -- by eliminating water rate subsidies for 28,000 city households that use Pennsylvania-American water.

Murphy allowed those payments and other council proposals he did not favor to remain in the budget because it reinforces his argument that the city cannot balance its budget with its current tax structure.

"This has been a difficult process but one I believe that highlights once again the challenge we face as a city. Pittsburgh needs to change its tax structure," he said.

The same argument goes for the parking tax, which will rise from 31 percent to 50 percent. Murphy and several council members said they will roll back the rate if the state approves tax reform or if commuter taxes are enacted through Act 47.

"We're hopeful the Legislature will act before we move forward too far into Act 47, and before this parking tax begins to have a serious impact on the city's retail business health," Murphy said.

The tax is levied against parking operators' gross receipts. For every dollar a lot collects, the city will take 50 cents.

Hertzberg said city residents are overburdened with taxes and would leave if their taxes are increased more.

"The parking tax falls on a different group of people. It does fall on some city residents, but it also falls on a lot of the commuter population," he said.