Local government will get a financial break this year, with the state government vowing to subsidise an increase to the Emergency Services Levy (ESL).
On Thursday, the state government announced the councils wouldn't pay the fee this year, citing the cost to council finances of bushfires and COVID-19.
Tamworth Mayor Col Murray said the financial aid was "very generous" but wouldn't last forever.
"I would suggest that the intention is the community would have to pay the insurance levy for next year," he said.
The levy was controversially increased by tens of thousands of dollars last year. Councils condemned the financial blow as state government "cost shifting" with Tamworth Regional Council lobbying for the entire levy to be scrapped.
Condemning state and Commonwealth government's "cost-shifting", he said ultimately the ratepayer would be feeling the delayed pain.
"We're at the bottom of the food-chain in terms of government hierarchy so we don't get much opportunity to decide who pays what - we're told, basically," Cr Murray said.
Member for Tamworth Kevin Anderson described the funding as a stimulus package and a welcome shot in the arm to local government.
"Our local councils simply cannot afford this financial burden in the wake of COVID-19, bushfires and drought," he said.
Last year's fee rise was introduced to support firefighters who developed cancers on the job.
The increase was controversial partly because it was introduced after local governments had drawn up their budgets.
But ultimately, Cr Murray said, firefighters are not local government employees and they should be looked after by state government, which also has greater financial capacity.
Mr Anderson said the increase in the ESL would be worth $639,175 to the four councils in his electorate.
"This funding injection will allow Tamworth, Gunnedah, Liverpool Plains and Walcha Councils to redirect funds to critical core services and deliver financial support for the local community," he said.
The Office of Local Government will pay a grant to each council equivalent to the increase in their ESL contribution for 2020-21.