Councils have welcomed news the State Government will cover a hike in the local government contribution toward the Emergency Services Levy.
Forbes Shire Council received an invoice nearly $70,000 higher than last year, and Forbes Mayor Phyllis Miller was one of many to protest the hike.
Council was only told of the steep increase, she said, after it had already finalised its budget for the year ahead.
The policy reversal - announced on Tuesday by Acting Premier John Barilaro and Local Government Minister Shelley Hancock - will see the State Government cover an initial increase of almost $14 million in the Emergency Services Levy paid by councils.
Council contributions were unexpectedly sent soaring to cover the cost of extending workers' compensation coverage for volunteer and career firefighters diagnosed with one of 12 specific work-related cancers.
Local Government NSW President (LGNSW) Linda Scott said the announcement followed months of intense work by the peak body and NSW local governments across the state.
"Local government strongly supports fairer workers' compensation for paid and volunteer fire fighters," Clr Scott said.
"In many areas, especially in regional NSW, Mayors, councillors and council staff are the core volunteers that make up our state's rural fire brigades.
Councils currently contribute 11.7 per cent of the Emergency Services budget in NSW, with the cost embedded in council rates and further costs recovered through insurance premiums.
"I look forward to having a real opportunity for both tiers of government to sit down together to develop a constructive way forward that involves a fair and realistic transition process towards a better, fully funded workers' compensation scheme for NSW firefighters and their families," Cr Scott said.
"By working together we can ensure the way forward that doesn't penalise communities across NSW in need of council services such as childcare, and infrastructure such as parks, roads and footpaths."