The West Suffolk Council portion of the council tax bill is set to rise by up to 22p per week from April, as part of efforts to meet the financial challenges of the Covid-19 pandemic.
West Suffolk Council's cabinet on Tuesday night outlined its 2021/22 budget plans, which features a Band D property facing a 3p per week increase in the former St Edmundsbury area, and 22p per week increase in the old Forest Heath area.
It continues a process to unify council tax rates between the two predecessor areas over a number of years, due to be completed by 2022/23.
The council's cabinet member for finance, Sarah Broughton, said it meant the authority "avoids drastic actions we have seen elsewhere" so that services can continue.
However, with council tax income only covering 20% of the costs it faces, the administration has launched a fresh campaign to lobby MPs and the government for fairer funding to address government contributions considered "not fit for purpose".
"We all welcome the funding provided by the government during Covid, but this is really not enough to cover the costs we have," Councillor Broughton said.
"There are ever-increasing demands on services and we will be playing a vital role in the recovery, as well as dealing with the loss of income that government expects councils to make up to make ends meet.
"Government funding is not fit for purpose and we will, with other councils, make this case to MPs and ministers for fairer and sustainable funding."
Authorities this year faced the double impact of extra costs from the pandemic, such as temporary accommodation for homeless people and PPE, alongside a dramatic loss of income from streams such as car park charges.
Around £1million in savings has had to be found in the 2021/22 budget, according to the authority.
Council leader John Griffiths added: "The severe impact of Covid-19, together with the need for further government funding, of course makes this a serious challenge.
"However, our strong financial planning and prudent management has meant we are in a relatively strong position even though we have had to find an additional £1m to balance the budget, and we anticipate that the impacts of Covid and limited national funding will continue for years to come.
"This is why we continue to lobby government to help fund local government fairly in recognition of the essential services councils provide for the people we serve here."
The final budget decision will be made by full council on February 23.
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