"COUNCIL staff wages account for up to 95 per cent of rates income and are increasing at a rate greater than the rates cap each year.
As councils struggle with a $7.4 billion infrastructure backlog, it can be revealed most rates income goes to wages, superannuation, training and even employee bonuses.
An investigation has found combining councils could save up to $224 million each year - which could be spent on maintenance of roads, footpaths and playgrounds that they currently can't afford.
NSW Treasury found one-third of councils could not afford to fix their communities, with that figure forecast to soar to 50 per cent within three years, and called on councils to make "significant changes in spending".
A Local Government NSW spokeswoman said councils were service-based and needed staff: "Staffing levels and their cost is a reflection of each council's range of services."
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