Local Government New Zealand believes councils could end up seriously short of money if they continue relying on levying rates on housing to pay their costs.
It says rates should be augmented by income such as a share of GST or royalties from mineral extraction, or imposing tolls on local roads.
Other methods could include local sales taxes, such as those in New York, or a poll tax imposed on each individual in a community.
That was tried in Britain but later abandoned when it proved unpopular.
LGNZ Lawrence Yule says he does not think anyone will be keen on a poll tax, even though it is a fair system.
A cross-sector working party will be formed for the LGNZ Local Government Funding Review during April 2014.