Forbes - and 85 other NSW councils - have been given permission to increase their rates revenue above a historically-low rate pegging limit.
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In December last year, the Independent Pricing and Regulatory Tribunal announced that the council could raise rates revenue by 0.7 per cent, but Forbes - and many other local government areas - argued that the rise was insufficient.
IPART has this week announced that Forbes will be allowed to increase general rates revenue by 2.5 per cent, as budgeted.
This year's fees and charges also see a 10 per cent increase in the water usage charge and about seven per cent increases in waste charges.
Forbes Shire councillors voted for the exemption to the rate pegging limit, after hearing that services would have to be cut if the council was restricted to increasing rates revenue by 0.7 per cent.
There would be a shortfall of $142,200 compared to the council's projections and budget, a report to the March council meeting said.
"Council originally budgeted for a 2.5 per cent rate peg increase for the 2022/23 financial year in its Delivery Program and Long Term Financial Plan (LTFP)," the report from Director Corporate Services Stefan Murru said.
"This ridiculously low rate peg combined with cost shifting by other levels of government and the shock of COVID, natural disasters, and increased regulatory burden all mean that rural councils are once again forced to cut back on essential services to our communities."
The council had forecast total rates revenue of $8.098 million for the year, up from $7.900 million in 2021 / 2022.
Deputy Mayor Chris Roylance said there would still be an issue.
"If we have a rate rise of 2.5 and we've got everything going up 20 per cent, it's a recipe for disaster really," he said.
"We've got everything going up way past 2.5.
"There's an issue here. A major problem for all councils, not just us."
Local Government NSW said the 0.7per cent rate cap was handed down in the face of surging inflation, soaring fuel and commodity prices and the need to repair extensive damage caused by the Black Summer bushfires and recent floods.
President Darriea Turley said the special rate variations announced were still extremely modest, coming in at around half the current inflation rate and one third of the Reserve Bank's predictions of 7 per cent inflation by December.
"Councils are the closest level of government to the community, and we know firsthand that individuals and local businesses in our communities are doing it tough," she said.
