Council chiefs have cut a grant it awards to Brecon Jazz Festival after organisers reduced policing costs by scrapping music in the streets.
Outdoor parade - the festival has called time on street music
Powys Council's board decided on Tuesday to donate £7,000 to the event instead of the usual £11,000.
The festival announced two weeks ago that there would be no street music at this August's weekend event, making a saving of more than £20,000.
Organisers said they were expecting the council to reduce the grant.
A festival spokesman said: "There are changes to the street music this year and the grant reflects that.
"We were hoping for £11,000, but were expecting £7,000."
Street music was to have cost Brecon Jazz £49,305, but marching and busking bands will perform at nearby Watton Field instead, lowering costs to £28,240.
Earlier this month, festival organisers said there had been concerns about drunkenness in the streets and they wanted to make the event safer.
Dyfed-Powys Police had also warned that a bill for extra town centre officers this year would double to £20,000.
This summer, Brecon Jazz Festival will pay its respects to the hurricane-hit city of New Orleans.
The programme will include music in tribute to the jazz city, which was devastated by Hurricane Katrina in 2005.
Stars confirmed for 11-13 August include veteran pianist Stan Tracey, Courtney Pine, Chico Freeman and Benny Golson.
More than 70,000 people are expected in the Powys town for the 23rd annual event.