WIMMERA councils are considering rate rises and cuts to services and infrastructure in a bid to balance their bottom lines.
Horsham Rural City Council and Northern Grampians Shire Council will have between $500,000 and $600,000 slashed from their budgets over the next three years.
The government announced the official Local Government Financial Assistance Grants figures last week.
They were indexed according to the Consumer Price Index but the indexation was frozen in the Federal Budget.
Horsham chief executive Peter Brown said council was considering its options.
"When you're faced with revenue cuts you have to consider all possibilities, but we will be first of all looking at expenditure," he said.
Mr Brown said council had taken a further hit after per person funding they received now came out of a fixed pool.
"Smaller shires are significantly disadvantaged because their share of the pool will be diminished," he said.
"We've contacted Member for Mallee Andrew Broad because we think rural councils are being doubly disadvantaged."
Northern Grampians corporate services director Vaughan Williams said the freeze meant council would have to make some tough decisions.
"For us it amounts to a five and six per cent rate increase to offset it or an equivalent reduction in services," he said.
"A reduction of that size really impacts on services."
Mr Williams said the freeze would have a cumulative effect and if grants were re-indexed after three years the base would be lower.
Yarriambiack chief executive Ray Campling said the council would lose $366,000.
"We're extremely disappointed with losing this money," he said.
"I think it has to be identified that particularly small rural councils are reliant on government grants."
Mr Campling said there would initially be reductions in road maintenance but he hoped it would be offset by increased Roads to Recovery funding next year.
He said in three years, councils would be behind after losing large amounts because of the freeze.
"Hopefully the impact isn't too significant, but when you are losing those type of dollars you have to work a lot harder," he said.
Hindmarsh Shire Council chief executive Tony Doyle said council had calculated a loss of $330,000 over the next three years.
"It will have a significant impact, there's no doubt about that," he said.
"That's money that would have gone into basic infrastructure services, road and other basic services that we provide."
Mr Doyle said councils would continue to lobby the Federal Government to reverse the decision.
He said regional councils had been hit harder by the freeze than their metropolitan counterparts.
"Our ability to raise revenue through rates is a lot less than a metropolitan council," he said.
"We don't have other revenue streams such as parking meters. We're far more reliant on these grants."
Deputy Prime Minister and Regional Development Minister Warren Truss said the first payments of the unattached funding had been made to councils.
"The Coalition Government is committed to ensuring councils and the communities they serve get the funding they need to deliver the infrastructure and resources of the 21st Century," he said.