The pricing watchdog has forced Wagga council to tighten its belt by forbidding a rate rise by more than 1.5 per cent next year.
The Independent Pricing and Regulatory Tribunal (IPART) weighed up price increases over the past year for goods, materials and labour used by the average council and decided an extra 1.5 per cent should cover it.
Mayor Greg Conkey, who described the rate rise as “very disappointing” said council services like parks and gardens, recreation facilities, roads and childcare could suffer.
“A slim 1.5 per cent increases will make it difficult for this council to maintain services,” Cr Conkey said.
“Councillors will carefully discuss this next week and make some very difficult decisions.
“Some services won’t be affected but unfortunately some are likely to be.”
Cr Conkey said council was already struggling to absorb $3.4 million the state government shifts to council every year.
Wagga homeowners are still bearing the brunt of a rate hike worth $7.75 million over five years to cover one third of the cost of the looming levee bank upgrade.
Flood protection is costing the average homeowner an extra $59 a year, farmers are forking out an extra $90 a year and the average business has to scrounge an extra $425.
Downside farmer David Meiklejohn said council should be able to keep its costs in line with inflation, which is currently running at 1.3 per cent.
“We already pay too much in rates as it is,” Mr Meiklejohn said.
“The levy over and above regular rates to pay for the levee bank upgrade is money farmers have to find in their small businesses.
“If the CPI (Consumer Price Index) increase doesn't cover increased council expenditure, council should rein its costs.”
A council spokesman has estimated the 1.5 per cent rate rise cap will be costly.
“Early estimates show the rate peg for 2017/18 equates to hundreds of thousands of dollars of lost revenue that will need to be accounted for during the 2017/18 budget planning process,” the spokesman said.