Ratepayers in the Liverpool Plains shire could be hit with a rate rise, should an application made by Liverpool Plains Shire Council to the state's governing body be successful.
The council voted to apply to the NSW Independent Pricing and Regulatory Tribunal (IPART) to explore the possibility of receiving a special variation to the rate peg, which could see rates go up.
The council's meeting papers said the reason for the application was because "council's current level of income will not adequately fund, in the long-term, its ongoing essential community services".
Deputy mayor Paule Moules said while not locked in, a rate rise was vital to ensuring the council could continue to service the community.
"I just consider this as a long-term thing. We need to get the process going now. We don't know if the government is going to start subsidising rates, so I just think this is a process we need to start now," Cr Moules said.
"We've already identified we need this rate increase.
"Yes, it is a hardship on the community; we're not agreeing to doing it, we're just agreeing in principle, so I just think we have got to start the ball rolling."
Councillor Ken Cutmore echoed Cr Moules' sentiments telling the meeting the council had not agreed to a rate rise yet.
"I just think we need to look at it, so that we can look at the facts and figures," Cr Cutmore said.
"We are only agreeing on principle, not as if we are doing it.
"It's something we should be looking at."
However, not all councillors were in favour of the application.
Cr Rob Webster said he believed given the shire's current concerns with the COVID-19 pandemic, "the timing of this is all wrong".
"I think when people think that we are even thinking about a rate increase it will send the wrong message," Cr Webster said.
"There's already a lot of unrest in the community, we don't need to inflame that at all.
"Really, with no costing, with no rate increase numbers and no value, it's all a little bit hypothetical.
"I'd prefer if we put it off for another 12 months. We've still got 12 months to run with the other increase, so I would move that we actually put it off."
Tamworth MP Kevin Anderson said the government was committed to working alongside councils to ensure businesses were supported.
"We will continue to work together," Mr Anderson said.
"Councils, I know, will continue to work with their community, as well in relation to what happens for businesses and rates that are under their jurisdiction."