In December last year, the Independent Pricing and Regulatory Tribunal announced that the council could raise its rates by 0.7 per cent, but Wagga - and many other local government areas - argued that the rise was insufficient.

In April, the council applied for an exemption to increase rates beyond 0.7 per cent and this week IPART approved that additional special variation, allowing Wagga City Council to bring rates up by 2 per cent.

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The rate rise means that council will receive an additional $630,000 from ratepayers next financial year and by 2031-32 the additional funds generated by the rate variation is projected to be $830,000.

Wagga City Council chief financial officer Carolyn Rodney said that if IPART did not allow the 2 per cent increase, the council would have been forced to cut services.

"Council does a long-term financial plan, we budget over a 10-year period, and we had factored in a 2 per cent rate peg," she said.

"Anything less than that I would have had to cut funding going towards important services like community facilities and the very popular roads budget."

Budgeting for the city can be difficult as council staff try to anticipate what increases IPART will allow each year, and Ms Rodney said the decision to allow an extra increase is proof that the methodology IPART used to calculate the rate peg "didn't hit the mark".

Wagga councillor Dan Hayes said the fact that 86 councils were approved for an additional rate variation is an admission by the state government that the rate rises were "poor".

Cr Hayes said that the increase is also justified by recent inflation rates.

"People want to pay less for everything, we all do. But what council is tasked to do ... comes at a cost," he said.

"No one likes to see prices go up, we want to make sure council is spending money on the things the community wants. This isn't a windfall that we get to splash on something, this is ensuring our core businesses can continue."

Lynne Bodell, the secretary of the Wagga Residents and Ratepayers Association, said that the rate rise has prompted "vigorous discussion" among members of the group and there are people both for and against the increase.

But she said there was a general consensus that the increased revenue will be worth it, if put to good use.

"We want to see [the money] used efficiently and we want the council to seek as many savings as they can," she said.

Despite cost of living pressures, Dr Bodell said a rate increase in some form was needed.

"Council has those same costs passed onto them that us as residents have to deal with. They still have to pay for fuel and ... their costs are going up," she said.

"It's going to be tough times for everyone but otherwise, where does the money come from?"

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