HUME ratepayers are set to feel the pinch of the carbon tax that comes into force in July with 1.4 per cent of Hume Council's proposed rate increase being attributed to the new charge.
The 5.4 per cent rate hike proposed by the council in its 2012-13 draft budget includes an 0.3 per cent EPA landfill levy cost.
The council estimates it will have to pay $1.62 million more in costs because of the carbon tax.
The draft budget shows a surplus of $50.64 million, with the council income for the year to be $221.94 million and expenditure $171.3 million.
Council chief executive Domenic Isola said the rate increase was the lowest on record in the past 12 years.
"Our draft budget strikes the right balance between funding key projects and services to meet the expectations of our community while minimising the impact on the household budget. At the same time, council is not compromised in what it intends to deliver."
Major capital works projects earmarked include new community hubs in Greenvale and Craigieburn, an upgrade of Broadmeadows Leisure Centre and extension of the Hume Global Learning Centre.
Mayor Ros Spence said population growth was a big factor in the budget.
Hume's population is predicted to grow by 100,000, to about 285,000 by 2030.
"The huge population growth brings opportunities for the city but also brings challenges. We want the best for our community and we're planning to cater for record growth."
Broadmeadows Progress Association assistant secretary Sonja Rutherford said despite a lower rate increase, rates in general were unfair to low-income earners.
"We need to look at the rating system to address this anomaly and injustice," she said.
"Rates are an unjust form of tax. Councils are going to find it more and more difficult to squeeze money out of people."
The draft budget will be open for public comment for 28 days.
Details: 9205 2200 or hume.vic.gov.au