A proposed 15.3pc hike in people's council tax bills could be lowered - but would still see people paying £22 per year extra.
Part of the money raised by Diss Town Council from the suggested increase would go towards staff salary rises.
The authority had proposed to increase its share of the council tax by 15.3pc for an average Band D property, from £163.92 to £189.03 per year.
Papers released ahead of a meeting on Wednesday to discuss its budget for the year ahead now say the proposed rise is 13.6pc, which would cost the average Band D property £22.35 more per year, or £1.86 extra every month.
The rise comes before any other council has made decisions over their share of the council tax bill, meaning the final amount residents of the Norfolk town would pay could be much higher.
The authority said it had lost £52,225 over a four-year period and 'has done very little to compensate for that shortfall'.
It said a grant from South Norfolk Council (SNC) - to compensate for changes in council tax benefit - had been reducing every year and is due to stop completely after the forthcoming financial year.
SNC, however, says the money comes from central government.
Part of the £62,272 the town council will raise from the increased bills will go towards raising salaries for its staff, with unions nationally currently consulting on a 2pc rise for workers earning above £19,430 and up to 16pc for those on lower pay.
'There is a balance to be achieved between maintaining a sufficient level of budget to continue to provide the current services and facilities whilst also minimising the impact on council taxpayers who are also being hit by increases by other authorities,' a report ahead of Wednesday's meeting said.
'It is appreciated that the current proposals represent a challenging decision for councillors. However the council is now feeling the impact of decisions avoided in previous years to mitigate for factors beyond the council's control.
'The council will continue to seek ways to improve efficiencies, make savings and generate additional income.'
Diss mayor Trevor Wenman said: 'The things the town council do are there for people to see.
'These are things that are available to people of Diss to enjoy and make life more pleasant for everyone.
'Diss would be a poorer place without them.'
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