Households in Hartlepool will pay an extra 3.9% in council tax from April after councillors approved the increase last night.
The first rise for five years, which includes a new 2% levy to help the council pay for social care, was agreed at a meeting of Hartlepool Borough Council by 21 votes to 10.
People will pay between an additional £2.12 a week for the most expensive homes in town and 71p a week for the cheapest properties.
Council leader Christopher Akers-Belcher blamed cuts by the Conservative government for the increase.
Hartlepool’s government grant is almost £4.5 million less for 2016/17 and the authority is forecasting a £16.3million deficit over the next three years.
Coun Akers-Belcher said: “In view of the government’s fundamental shift in council tax policy I believe the right thing to do for the long term financial sustainability of services is to increase council tax by 3.9%, including a 2% social care precept.”
The council says the rise will raise £1.3m and prevent further cuts to services.
But opponents accused the Labour-majority council of wasting millions over the last few years.
Coun David Riddle of Putting Hartlepool First said the council held £62 million of reserves adding: “I cannot and will not support a council tax rise which is squeezing the spending power of every man, woman and child in this town.”
A Conservative group proposal to save £890,000 by putting Mill House Leisure Centre in the private sector and increasing Local Council Tax Support cuts from 12% to 20% was lost.