Residents in Preston could see a 2.99 per cent increase in their council tax payments in the next financial year.
One city councillor has said central government cuts have left the local authority with little choice but to raise the household tax.
Coun Martyn Rawlinson said: “The Government has forced councils down this path. They have no choice.
“It’s either that or slash services to the bone and we are trying desperately not to do that. The council tax has been one of our safest income streams.
“We have no choice to raise council tax to the most that the government will allow us.
“They are capping it at three per cent this year.”
If proposals are approved, the increase would mean, for example, Preston Council's share of the council tax on a Band D property would rise to £314.50.
The rest of the £1,845.20 annual bill is made up of contributions to Lancashire County Council, the police authority and parish councils.
Council documents state that recent “changes by central government to the council tax referendum principles allows PCC to increase council tax by up to three per cent in 2019/20.
“The council tax referendum figure is three per cent for 2019/20.
“This means if the council sets a council tax of three per cent or above it would have to hold a referendum to agree the increase.”
Responses from the budget consultation will be presented to members at the budget cabinet meeting in February.