The District’s $10.8 billion budget is set, after the D.C. Council voted for a second and final time Tuesday afternoon to approve its fiscal 2012 spending plan.

However, several provisions remain contingent on new revenue expected to be certified later this month.

Next week, Chief Financial Officer Natwar M. Gandhi is expected to announce an upgrade in anticipated revenues for the coming fiscal year, which begins on Oct. 1. The council has chosen to designate in advance how that money will be spent.

In May, the Council voted to use the first $20 million to free up funds for capital projects, then to save 50 percent of any additional dollars to increase city reserves. On Tuesday, its members argued for more than three hours largely about how to spend any remaining dollars.

In an unexpectedly heated debate, the council split over whether to include atop that list $32 million in additional funds for the city’s Medicaid providers. Mayor Vincent C. Gray asked the council to make that money a top priority for future revenue, saying that low reimbursement rates have led one managed care organization to threaten to end its contract with the city. Some council members argued that the concerns were overstated, but their attempt to remove the infusion failed narrowly.

A proposal to replace a previously approved tax on non-District municipal bonds with a new income tax bracket — floated Monday by Mary Cheh (D-Ward 3) — was not offered for a vote. Rather, Cheh introduced an amendment that would have placed the elimination of the bond tax as a top priority for the anticipated revenue. It failed, 7 to 6.

A proposal by Jim Graham (D-Ward 1) was more successful. Members supported adding to the priority list a $1.8 million infusion into “Green Teams” and “Clean Teams” which supplement regular city services in four city wards.

The Medicaid expenses and “Green Team” money means that much more city revenue will have to be realized before other priorities will be funded — including $10.8 million for additional city police.

Phil Mendelson (D-At Large) spoke out against the changes and voted against final passage of the budget legislation. “To allow the size of the Metropolitan Police Department to shrink is ... unacceptable in my view,” he said.

Also voting against the final bill was Jack Evans (D-Ward 2), who opposed the new bond tax.