Hyndburn councillors will vote on a recommendation to raise its council tax precept by 2.1 per cent and make almost £1.7 million in cuts.
The tax rise is being blamed on the withdrawal of Lancashire County Council (LCC) funding support for recycling services.
Bosses are also proposing more than £1 million in cutbacks, but state that these will be mostly found from a reduction in ‘back office’ costs.
The precept rise would form part of overall hikes of £60 a year in council tax bills, mostly due to county hall’s highest precept rise in a decade - 5.99 per cent.
Leisure services will lose £867,000, while £640,000 is proposed to be saved from the Policy and Corporate Governance department.
However, Hyndburn council says that thanks to years of successful financial management it has not had to opt for the maximum charge rise available.
Council leader Miles Parkinson said: “Setting the budget for 2018/19 has been the hardest challenge we have faced since taking control of the council in May 2011.
“This year has been made more difficult because the county council has withdrawn its financial support for the collection of recycling materials and this added a further challenge to the council of finding over £800,000 of savings on top of the loss of £500,000 of government grant.
“These are huge figures for Hyndburn to find, especially given the savings we have already made over last nine years.”
The ‘Cost Share Agreement’ with LCC had paid £821,000 to Hyndburn to assist in separating household waste for disposal, recycling and landfill.
Coun Parkinson added: “This increase we have had to introduce is 2.12 per cent for 2018/19 and I am pleased to say that it is below the rate of inflation, which is currently at 3 per cent and that our increase is substantially below the rate of many other councils across the country.
“Across all public sector organisations currently there is a huge challenge to do more for less, this year’s budget for Hyndburn has required us to look right across the whole of the organisation to ensure we are doing everything we can to deliver the right services for our residents in a way that delivers value for money.”
The council will also vote on plans to invest in £400,000 improvements to its waste services, including the rollout of new wheelie bins to replace the bags and boxes currently used for recycling collection.
Coun Gareth Molineux, Cabinet Portfolio Holder for Resources, said: "Each year it gets tougher to set a budget that helps the council deliver the services that the residents of Hyndburn expect. This year has been no different.
"It’s an easy win to raise council tax to the full amount we are allowed each year but it is not one that sits comfortable with us. This is why we have not raised it to the maximum this year.
"The residents of Hyndburn are struggling. Many have not had a pay rise in years and with inflation rising, it would not be right for us to burden them with the extra increase in council tax set at the maximum.
"We have balanced our need for extra income with the need for residents to have a little money left at the end of the month. As a council we have a responsibility to charge what we actually need and not to charge the maximum just because we can. This sits in line with the tax payers allowance views that hyndburn council Is one of 7 councils in the country that are actually good value for money."
A further £1.2 million will be invested in Accrington Town Centre, £1.7 million in housing regeneration, £828,000 committed to improving homes for those with a disability, and more than £800,000 in other building, operational and infrastructure projects.
The report to cabinet states: “These new bins will provide significantly more capacity to hold recyclable waste and end the current situation with the existing service in which recyclable materials presented for collection in bags and boxes are often emptied, either accidently or deliberately and litter the streets.
“Despite the difficulties over the last three financial years caused by further reductions in our funding from government, the council has continued to maintain its finances and provide value for money services.”
Altham Parish Council does not intend to increase its precept.
Residents are being invited to have their say on Hyndburn council’s budget.
A meeting will be held at Scaitcliffe House in Accrington at 2.30pm on Monday, February 19.