The Essential Services Commission made the decision for the 2018-19 financial year on Thursday.

Ballarat City Council will not be able to raise rates above the cap for the next financial year, although they can apply to the commission for an exemption.

Ballarat City mayor Samantha McIntosh said although the cap was .25 per cent higher than the previous financial year, it would only add a small amount to council coffers.

“With that degree of capping it will still mean we have to review the services we currently provide,” she said.

“The community need to be aware how much the tax distribution affects regional communities.

“We want to see a much fairer portion of taxes beings spread through regional Victoria to respond to opportunities we are putting on the table for growth.”

Council’s request for a rate variation above the cap was knocked back in 2016 because it did not show it had adequately consulted ratepayers on the issue.

Cr McIntosh said it was “unlikely” council would apply to the commission for a rise above the cap.

“The current council has previously made a decision not to, so presuming we don’t have any different action, we will continue operating as we have been,” she said.

Pyrenees Shire Council was approved for a rate hike this year, as long as the extra cash was spent on maintaining its large road network.

Councils were given until January 31 to apply for a rate rise.

There was some good news for local governments, with consumer price index putting inflation at 1.8 per cent.

The data from the Australian Bureau of Statistics means there should be a small revenue increase if council votes to approve the full 2.25 per cent rise next year.

Councils have until January 31 to apply for a rate rise.

Local Government Minister Marlene Kairouz said the days of ratepayers being hit with year-on-year rate hikes were over.