Local authorities have reported a drop in income for the most recent quarter.
Stuart Crosby. Photo: RNZ/ Andrew McRae
Figures from Statistics New Zealand showed nationwide, the total operating income for councils was $225 million less than in the previous quarter.
It brings councils' revenue down to levels not seen since September 2018.
They were particularly hit by a significant drop in sales and other operating income, which dropped from $480 million the previous quarter, down to $350 million this quarter.
Local Government New Zealand president Stuart Crosby said the figures weren't a surprise, but it is did mean local authorities were having to stretch budgets as far as they would go.
"What sources of revenue which have been reduced are often user fees and charges for various activities of councils," he said.
"Some councils own businesses where they get dividends. Of course the activities have to keep going for most of them, so it's put a lot of pressure on councils' budgeting."
While total investment income was up on the previous quarter, it was down by 45 percent on the previous year.
"Those funding tools haven't changed in decades, and yet the operating environment that we're operating in is now a lot more complex. More and more roles are being put onto local government over the last thirty year," Crosby said.
"Levels of service they have to deliver - drinking water standards, wastewater, transport, open spaces, park reserves, libraries etc. - all those costs are going up and yet the funding tools remain the same.
"Covid-19 is going to articulate this even sharper as we move forwards."