Angus Council has frozen tax levels, but said it had made budget cuts of almost £2m because of a shortfall.
The decision means Band D council tax for 2007-08 will remain at £1,072.
The local authority said it had managed to deliver a budget which would be invested in services, also because of increased funding and surplus cash.
Resources convener Alex King said: "There is a shortfall between what we have and what we need to pay the bills and invest in services."
He added: "To close that gap, we've made almost £2m of budget cuts and efficiency savings and we are using some of the general fund balances to put almost the same amount again into the pot."