Welsh councils will get almost £3.5 billion in funding from the Welsh Assembly Government in 2006/07 for local services, it was announced this week.
The money is 5.1% more that last year's settlement and includes £3 million to meet the extra cost of Landfill Tax.
Local authority capital projects will have a total of £610 million from the funds. This is 4% more that last year, and includes in particular additional provision for waste management projects.
Local Government Minister Sue Essex said: "In preparing this settlement, I have worked closely with Welsh local government to identify increases in costs and the need for expansion of particular local services.
"This settlement is a good and fair deal for both local government and council tax payers."
Essex said that a consultation project would be issued later in the week on moving to three-year settlements to assist local authorities with better forward planning for the efficient use of resources and improvement in service delivery.