The amount of money council tax payers hand over to East Lindsey District will increase by an average of seven pence a week.
ELDC says it needs to find £1.6m to balance its books due to reduced Government funding and cost rises in utilities such as fuel and electricity.
The council stresses the proposed increase - the first in three years - will mean it can protect front line services.
The figures do not include any increases in the County Council precept, Parish and Town Councils or the police.
The budget proposals - drawn up by the Executive Board - will be put to a full council meeting next month.
Councillors have been warned they must make even tougher decisions next year because of a further 13 per cent cut in Government money.
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Weather for Horncastle
Wednesday 19 June 2013
Temperature: 12 C to 23 C
Wind Speed: 13 mph
Wind direction: North
Temperature: 12 C to 17 C
Wind Speed: 12 mph
Wind direction: North east