Wagga City Council's future budgets might need to be adjusted after the state government announced a hike in the emergency services levy.
The government on Wednesday informed councils across the state that they would have to pay a higher share of a levy to fund firefighter cancer compensation claims from paid and volunteer services.
The cost of the levy is split between companies providing property insurance and councils, but the level of increased payments will vary between councils.
Corporate service director Natalie Te Pohe said Wagga council had "not yet received correspondence from the NSW government advising what the financial implications will be".
"Council has budgeted approximately $581,000 for the Emergency Services Levy in 2019-20," she said.
"Any increase on this figure would have to be accommodated in the budget."
Wagga Ratepayers Association chief Lynne Bodell said it was important to support firefighters and it was a difficult question whether the council or the state government should collect the money.
"My husband is in the Rural Fire Service and I know what a good job they do," she said.
"We are going to have to pay in some form or another, whether through higher rates or taxes from the state government."
Wagga mayor Greg Conkey has previously criticised "stage government cost shifting" and said it had already cost Wagga council $3 million per year via a "conservative estimate".
A NSW Office of Local Government message distributed to councils said the new levy amount would be enacted from July .
The first payments had been delayed until September 30 to "lessen the impact" and provide "more time for "councils to review their budgets".
"The NSW government has made changes to workers' compensation to provide better protection for volunteer and career firefighters affected by work-related cancers," the message stated.
"The reforms reflect existing arrangements in other states and will ensure those who provide vital community services receive adequate medical care and support.
"This will result in an increase in the cost of providing emergency services, which will be shared as per the usual arrangements."
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