Calne Town Council has voted to increase its precept by 2.39 per cent, but the amount the average household pays in council tax will remain at £3.80 per week.
The decision, made on Monday, will help to fill a funding gap of around £57,000 now that central government has changed the way council tax benefits are allocated.
Last year the council was given a grant from Wiltshire Council to help with the financial shortfall, but this year they will receive 35 per cent less grant money.
A proposal to increase the precept by five per cent was also suggested by Coun Alan Hill, but other councillors said this would have a negative effect on residents.
The precept will now be set at £1,039,984 for 2014/15.
Coun Charles Boase said: “It’s surprising to know that in this town there are people in work who have to go to food banks. I don’t want to tax these people any more when we don’t have to.”
To calculate council tax for the average household in a Band D property the precept is divided against the council tax base.
The 2.39 per cent rise in precept has been offset by an increase in the council’s tax base from 5080.29 to 5201.48 as more houses have been built in Calne in the last year.
Town clerk Linda Roberts said she had also made savings of £87,000 by going through next year’s budget and reviewing several areas, including staff salaries, travel expenses and maintenance.
Over the last three years the town council has not increased its budget and now £17,000 will be budgeted over the next five years to build up the council’s capital and reserves.
Mrs Roberts said: “Because we are very efficient in how we set our budget, we don’t overestimate figures, it’s even more difficult to try and cut something.
“Next year it might be more difficult or it might be easier if we get more development, because we have some more housing that will come into fruition.
“Of course now they have changed the support for people on benefits if the economy takes a downturn that could affect the number of people able to pay council tax.
“We have never had to rely on income from anyone other than the tax payer in Calne but now we’re relying on the grant from Wiltshire Council and that’s not going to be forever.”
Coun Hill said: “We know that the amount of money coming in to the town and parish council is to be cut year on year over five years, of which we are going to start the third year.
“You can only make cuts once, if you cut something, say the amount of flowers you buy your other half it may be you can only do it once. Then you have to find something else to cut and you cannot go on.
“Other councils are putting up the budget by significant amounts, they acknowledge the risks in the future and they are doing something to make sure their services can be guaranteed.”