Hampshire residents could face a 3.99% council tax hike to make up for a cut in county council funding.
The rise would generate £20m extra towards plugging a funding gap of £81.5m in Hampshire County Council’s 2016/2017 revenue budget.
A county council cabinet meeting on Friday night also discussed using £55m of its reserves to balance the budget.
County Council leader Roy Perry said it was “the most challenging period of the prolonged national austerity measures”.
Under the proposals, the 3.99% increase would equate to an extra £41.40 for the year 2016/17 for residents in an average Band D property, bringing the total to be paid to £1,079.28 from 1 April.
Mr Perry said the proposals came in the wake of deeper cuts in funding by central government, which was £29m worse than expected.
He said: “We have a strong reputation for careful financial planning, which has delivered £240m of savings since 2008, but it’s clear that having lost so much of our government grant, future savings will become even harder to find.”
He said the county council would continue to find savings to protect front-line services by reducing the cost of back office functions such as finance, payroll and HR.
A final decision will be made on 18 February.