The NSW government revealed in July plans to overhaul the way Fire and Rescue NSW, the Rural Fire Service and the State Emergency Service are funded, flagging the proposed introduction of a state-wide levy on land values.

The scheme, similar to local government rates, would replace the current system whereby taxes on insurance companies fund the bulk of the costs (almost 74 per cent) and local and state governments make up the rest (11.7 per cent and 14.6 per cent respectively).

In a response to the government's discussion paper on the issue, Wollongong council staff have advised councillors to oppose any move to have the tax collected at a local government level for fear of backlash towards the council.

"It is recommended that the council support the collection of this levy by the Office of State Revenue, thus removing any opportunity to damage council's reputation," a report to be debated at next Monday's council meeting said.

"There would be a perception that this cost to the resident is related to the council.

"It must be clearly articulated that local government has no responsibility for these costs."

Council staff have also recommended that councillors back different tax rates for country and city areas and a concession rate for pensioners.

Financial figures show the council paid the state government $3.1 million in emergency-service levies during 2011/12.

The council also pays for the maintenance of RFS and SES property and vehicles.

The state government described the current system as "inefficient" and "unfair", saying uninsured or under-insured people received the same access to emergency services as those who contributed to the levy via their insurance.

A property-based levy system is used to fund emergency services in Queensland, Western Australia, South Australia and the ACT.