North Dorset District Council will increase council tax for residents in order to prevent borrowing and stop cuts to services.
The Council's Cabinet recommended raising the charge by £5 per year - meaning North Dorset locals will still pay less than those in any other Dorset local authority.
The full council will meet on Thursday February 21 to consider raising the district council charge to £109,78 per year for a Band D property.
Cllr Deborah Croney, Leader of North Dorset District Council said: "We have held council tax for the last two years and we are fully aware that most residents would have preferred to see no rise again this year, given all the other pressures on household budgets.
"Cabinet considers this to be the right decision because, without this income, the Council would be forced to borrow in order to fulfill our commitments and to provide essential services to the district.
"Borrowing costs money: money earmarked for services would have to be diverted to finance our debts."
In the next financial year, North Dorset District Council hopes to invest in a number of community projects including connecting residents and businesses to super-fast broadband and introducing a new waste and recycling scheme.