The authority’s full council today (Friday) voted by a majority to approve the rise.
Leaders previously said they have been forced to tackle a reduction in the highways budget by 25 per cent.
Opposition leaders tried to force through a vote on a lower rise, requesting a four per cent rise topped up by £6.45million from the council’s reserves, however, this was rejected.
Conservative Council leader Martin Hill on Friday welcomed extra government money which had been announced, but said the authority was still “short of what we should receive under a fairer funding regime.
“At a time when so much financial support has been provided to individuals, businesses and organisations across the UK in response to the pandemic, it’s not entirely surprising that there will now be limited additional funding for councils.
“Our ability to find savings in addition to the £300 million since 2011 is also becoming increasingly difficult, but we are committed to doing all we can to use taxpayers’ money effectively.”
The authority expects to save a further £25 million over the next four years through a series of measures such as home working, increased use of digital technology, a reduction in administrative posts and the disposal of surplus buildings.
The rise will take the average Band D Council tax payment to the county council to £1,432.17 for the year
It is hoped the funding will help generate £15,901,000 for the council.
However, Coun Hill warned: “A failure to fund services properly now will have an impact on residents in the future. We don’t want to see frontline services cuts that will most likely impact the most vulnerable.”
He said that meeting the highways shortfall using reserves was “not sustainable” adding that it was “incredibly disappointing” the government had not responded to the Fix Our Funds, Fix Our Roads campaign.
During the meeting, councillors voted in favour of allocating £12m from a combination of resources toward covering Lincolnshire’s road maintenance funding gap.
Coun Hill said: “The missing money will be made up by a two per cent increase in tax plus cash from our reserves. These funds will allow us to fully rebuild 37 total miles of crumbling road in addition to filling 24,000 potholes that would have gone unfilled.
“That’s why we need fairer funding for the residents and drivers of the East Midlands and Lincolnshire. We cannot continue to be overlooked and will continue to fight for the roads our residents deserve.”
He said work was going on to improve things like adult care, protecting vulnerable children, improving opportunities for travel and road upgrades, green projects and flooding solutions.
Coun Hill said despite an increase in government funding, the council will continue to face significant financial challenges over the next few years.
“Revised estimates show we face a shortfall of around £22m over the following three financial years
“We know this is also a difficult time for many families, with rising inflation and energy prices. However, it’s important that we protect the frontline services our residents rely on.
“We estimate our adult care costs will increase by around £13.5m in 2022/23.
“We’re disappointed that local taxpayers are again being left to foot the bill, especially when the government raises billions each year through fuel duty and road tax. So, we’ll continue our fight to ensure Lincolnshire gets fairer funding in future.
“Lincolnshire will still have the second lowest council tax of the shire authorities.
“Even with the rise in council tax, we will still need to use £2.3m from our reserves to balance the books in 2022/23.”
Coun Richard Davies, executive member for highways, said: “Despite our best efforts and continued efficiency improvements in the way we work, it would cost around £400m to bring all our roads and pavements up to standard.
“Without proper funding from Westminster, people will continue seeing more potholes on our roads and more unplanned roadworks – both of which have a hugely detrimental effect on people’s day-to-day lives and the local economy.
“In the meantime, we’ll continue working as efficiently as possible to keep our county’s road network up-and-running.”
Independent County Councillor Ashley Baxter however said the rise was “too far” and failed to “treat residents with respect”.
He added there was no further consultation on the extra cash increase – which he said suggested “people think three per cent is enough”.
“It doesn’t feel we’d be treating our residents with respect to demand such a big increase with £60 million already in the piggy bank and knowing there’s another £7 million raised in council tax last year that isn’t being spent on the services it was collected for.”
He said the opposition amendment would cover the highways shortfall, fund increases to tackle rising waiting times to treat children facing mental challenges and take action to cut carbon emissions.
Speaking for the council’s Shadow Executive - made up of Independent and Labour councillors – Coun Baxter launched the case to limit the overall rise to four per cent and use £6.45 million from reserves to cover the highways shortfall, fund modest increases to tackle rising waiting times (of up to a year) to treat children facing mental challenges and take action to cut carbon emissions.
Coun Karen Lee (Labour) said: “We all know hard-pressed families across Lincolnshire are struggling to meet the most horrendous cost of living crisis for a generation: energy, fuel, and food prices are rocketing on top of record national tax increases. That’s why it’s right today that we limit the council tax rise.”
During an interview with Local Democracy Reporters yesterday, Prime Minister Boris Johnson promised to ask his government to look again at the highways funding issue.
He said there had been “massive investment” in Lincolnshire’s roads, including £165 million for the Eastern bypass, however, he acknowledged it was “still something that we have to fix”.
“I am well aware of this issue that your excellent councillor rightly raises and we’ll do what we can to fix that.”