Dunedin residents are facing a proposed rates increase of 7.5%.
The proposed rise, which comes at the end of draft annual plan deliberations by the City Council, is less than was initially projected.
If the plan is adopted, council rates would go up by 6.5%, with higher waste and water charges taking the total increase to 7.5%.
Dunedin Mayor Dave Cull says the increase is a result of decisions made up to 18 months ago which have left the council in debt.
The Otago Chamber of Commerce says it hopes the proposal won't deter business growth over the next year.
Neville Poole from the Dunedin Ratepayers and Householders Association says low income earners will be hit hard.
The annual plan will be available for public comment from mid-March.
In the meantime, the council's chief executive has been asked to find further savings in council costs.
