The Taxpayers' Union lobby group says local government needs to improve its budgeting for capital projects and infrastructure.
That was up from $10.1 billion the previous financial year, although total revenue has also climbed to more than nine billion dollars a year.
Executive director of the Taxpayers' Union Jordan Williams said the debt would keep rising unless local authorities budget better.
"Local councils, despite raking in nine percent more in revenue, the money isn't going on the infrastructure that's needed instead it's being swallowed up by operational expenses."
