The NSW government collects payments from councils and insurers to fund emergency services agencies, with councils required to pay 11.7 per cent of the budget required by NSW Emergency Services.

Cabonne Director of Financial Services Luke Taberner said the council received an invoice from Revenue NSW for $63,099.10 for its emergency services levy contribution.

"This is $6,390 more than last year's levy (a 11.26 per cent) increase," Mr Taberner told councillors at the council's May meeting.

"This will mean council will need to find additional funds and/or cut planned initiatives or services.

"Council supports career and volunteer firefighters in NSW, as it does all emergency services workers and volunteers. Indeed, many NSW council staff and councillors are volunteers. We also support the Bill passed in November 2018 to address what was a workers' compensation shortfall.

"However, the sector was at no point advised that it would be required to cover the cost via significant increases to the emergency services levy, or what this cost would be."

In the coming financial year the state government plans to collect an additional $160 million from councils, communities and those paying insurance premiums to provide better workers' compensation coverage for volunteer and career firefighters who are diagnosed with one of 12 specific work-related cancers.

Councils were sent invoices with a letter from Revenue NSW in May, advising council contributions will increase by $19 million in 2019-20.

"The letter also foreshadowed increases in the following year, but not the amount," Mr Taberner said.

"Proportional to council revenue, the extra $6,390.38 Cabonne Council is being asked to pay is a large amount, and the impact of this unplanned cost will certainly be felt by the community.

"Local Government NSW is calling upon the NSW government to fund the first 12 months of this extra cost and work with local governments to ensure the implementation of the funding mechanism is fairer into the future."