Finance bosses at City of York Council are suggesting the largest possible rise in council tax - as they grapple with a budget crisis.

As previously reported by The Press, the council faces an "unprecedented" budget crisis - which will require it to fill a £30 million black hole.

While no budgetary changes have yet been announced, reducing highway investment and 'streamlining' parking charges have been suggested.

Following the news of the budget black hole, The Press asked the council if its plans to raise money include a rise in council tax.

Debbie Mitchell, director of finance at City of York Council, said: "The council’s financial planning for the next three years, from 2025/6 to 2027/8, includes a projected budget gap of £30 million.

"To address this, we are suggesting a council tax increase of 4.99 per cent for the year 2025/26 and the next two years. The reason for the 4.99 per cent rise is to help us cover rising costs, like higher prices for the things we need and more people using our services.

"While these increases are factored into our planning, they alone will not fully close the budget gap. Therefore, we are also consulting with residents on further options for balancing the budget, including additional revenue-raising measures and cost-saving initiatives.

"Ultimately, decisions on council tax and other budget measures will be made by councillors at the budget council meeting in February 2025. Without these increases, the budget gap would be significantly larger, requiring more difficult decisions on services.

"We remain committed to an open and transparent process and encourage residents to participate in the consultation to ensure their priorities are reflected in the final budget."

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Based on current figures, a 4.99 per cent increase to Band H council tax payers would see them charged an additional £203.45.

Deputy leader of York's Liberal Democrats - Paula Widdowson - said: "This Labour council was elected on a manifesto promise to freeze council tax.

"Instead they immediately imposed the maximum 4.99 per cent rise and are looking to do the same again this year.

"We are in a cost of living crisis, Labour are hitting the vulnerable again.

"They have already removed the winter fuel allowance, stopped funding Age UK day clubs and are looking at reducing funding for buses.

"The Lib Dems are seeking assurances that if the Labour Government gives councils the power to set even higher council tax increases, York’s Labour run council will not use these to powers to increase council taxes even more than the 4.99 per cent hike they have put in place."

Labour's Cllr Claire Douglas, the leader of City of York Council, said: "The national Labour Party pledged to freeze council tax in 2023-2024 had it been in Government. York Labour welcomed and endorsed that historic commitment. 

"After winning the local elections Labour inherited a £40 million overspend in the City of York Council finances left behind by the outgoing Liberal Democrat Party. 

"Nationally the new Labour government discovered the true scale of the previous Conservative government's financial mismanagement with the inheritance of a £22 billion black hole.

"Both nationally and locally Labour are making the tough and responsible decisions needed to fix the problems caused by 14 years of underfunding and austerity."