Leaders in Carmarthenshire have reined back on a proposal to raise council tax by 4.4% per cent in April.
The Plaid Cymru-led administration now expects the increase to be 2.5%, and said a council tax freeze would be "totally irresponsible" given the financial pressures it faced.
The council tax levied by the authority is currently £1,361.97 for Band D households. The actual bill is higher due to a Dyfed-Powys Police precept.
Opposition leader Cllr Rob James said council tax would have risen by more than 30% under the new plan since Plaid started running the authority in 2015.
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The Plaid administration has been consulting on spending and savings proposals for 2022-23 and will draw up a final set of plans before the budget is set by full council in early March.
The authority expects to receive £311.6 million from the Welsh Government - £26 million more than the current financial year - towards a budget for key services like social care of £417.8 million. The remaining money will come from council tax.
The provisional 4.4% tax rise raised concern among Plaid councillors, said Cllr Alun Lenny.
“People are facing considerable hardship, so we're determined to keep the council tax increase to the very minimum, without having to make savage cuts to services,” said Cllr Lenny, on behalf of the Plaid group.
But he said this was "immensely difficult", given that inflation was at 5.4% and rising.
Pay awards for council staff were budgeted at 4%, he said, and fuel and energy costs for council buildings and vehicles were likely to soar by 20%.
In addition, councils will be expected to pick up hardship costs related to Covid from the Welsh Government from April 1.
Cllr Lenny also said a £3 million road repair grant was ending, while the UK Government's National Insurance rise of 1.25% in April would add £2.7 million to the council's balance sheet.
“Obviously, we’d have preferred a council tax rise freeze, but that would have been totally irresponsible, as essential services like social care are already under the greatest pressure in our lifetime," he said.
"Quite simply, people would die as a result of less funding."
Cllr Lenny said that after years of UK Government austerity, keeping the council tax hike to 2.5% "would be a considerable achievement".
Labour's Cllr James said households had, as a result of the Plaid-led administration, seen frontline services reduced and the condition of their town centres, play facilities and schools deteriorate, whilst projects like the "Hollywood-esque" sign for Carmarthen were funded.
“At a time when labour councils in Neath Port Talbot and Bridgend have announced council tax freezes, due to the best local Government settlement from the Welsh Labour Government, Plaid in Carmarthenshire are continuing to cut services whilst hammering hard-pressed families with tax increases to fund their pet projects," said Cllr James.
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