Shellharbour City Council could take the fight over a "highly damaging" increase in the emergency services levy to the state government.
Earlier this week the state government sent NSW councils the bill for their portion of the emergency services levy (ESL).
The levy, introduced in 2017, helps fund groups like the Rural Fire Service.
The levy is split up in three parts, with insurers paying the lion's share and councils paying 11.7 per cent.
The previous state governments had paid the annual increase in the levy on behalf of councils, but the Minns government has put an end to what it called an "ad hoc" arrangement.
In response, Shellharbour Mayor Chris Homer has tabled a Mayoral motion calling on council to oppose the "last-minute decision" to pass on the full amount of the council portion of the levy.
"For council, the ESL has increased by approximately $310,000 for 2023-24, bringing the total council contribution to $1,759,889," Mayor Homer's motion stated.
He also said that equated to 15 per cent of the revenue to come from council's 3.7 per cent rate rise, approved by the Independent Pricing and Regulatory Tribunal (IPART).
Unless the government reversed its decision, Mayor Homer said the levy increase could affect council's ability to upgrade existing infrastructure and limit the introduction of new services to the community.
"The timing of this development is particularly challenging for councils as it comes so late in the local government budgeting cycle, well after IPART's rate determination for the coming financial year," Mayor Homer's motion stated.
Mayor Homer said council valued a well-funded emergency services sector, but the way the state government was approaching that funding left much to be desired.
"It is essential that these services be supported through an equitable, transparent and sustainable funding model," the motion stated.
His motion called for council to write to the government expressing its opposition to the rise in the levy, and requesting the decision be reversed.
The motion also included writing to the IPART chair about the "additional financial stress" of the levy and to the president of Local Government NSW.
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