Dunedin ratepayers face a rates rise of 7.8% unless city councillors find ways to cut spending.
That's a percentage point higher than the figure signalled in the draft annual plan.
Mayor Peter Chin says the main reason for the increase is that the council has allocated an extra $400,000 for economic development initiatives.
He says the majority view is that the council needs to play a role in stimulating the local economy.
It's up to councillors, he says, to decide whether to trim budgets in other areas in order to reduce the projected rates rise.
The matter will be debated at a council meeting before the annual plan goes out for public consultation.