Households in Sunderland will be paying five per cent more council tax in 2017/2018.
Senior councillors on Sunderland City Council's ruling Labour cabinet have approved the rise at a meeting in the Civic Centre.
The increase amounts to an extra 79p a week for the majority of households in Sunderland, who live in a Band A-rated property. Band D properties will pay an extra £1.18 per week.
Cabinet Secretary Councillor Mel Speding said: "The council has continued to address cuts by maximising back office savings and utilising corporate resources where possible.
"However, the scale of the funding cuts and cost pressures which the council has had to make over the last seven years mean we are simply no longer able to fund frontline services to the level we want to."
Councillor Celia Gofton: "Raising the council tax in this way, there are households in this city who will suffer and it is heartbreaking that we have had to do this.
"I will agree to this budget, but for me I will do that completely reluctantly and only because by law I am obliged to."
The rise must be approved by by councillors at a full meeting of Sunderland City Council on March 1, but is unlikely to be voted down.
The council tax raised for 2017/18 includes the impact of a two per cent social care precept for 2016/17, and a further three per cent social care precept for 2017/2018.
Sunderland Conservatives leader Councillor Peter Wood, however, said there was no need for council tax rise of the level proposed.
He said: “The Conservative Group supports the precept to fund social care but feels that overall the council tax does not need to rise by five percent as there are further savings to make and more income to bring in.
"Loss-making enterprises such as Sunderland Live, Software Centre and the Empire Theatre are hitting the council’s finances hard and not enough has been done to make them profitable.
"Likewise Sunderland loses too much on parking charges whilst other councils rake in millions and hands out unneccessary grants to the football club for concerts, to trade unions for salaries and to refurbish the city library just months before it closes.
He added: "The failure to grow the council tax base is also making the financial situation worse as there are too few higher band properties and too many areas where houses have been demolished and not replaced.”
More details on rates and the council's budget to follow.