Essex County Council will freeze council tax for the fifth year in a row, but it needs to save £200,000 per day for the next three years.
The authority plans to invest £270million in 2015/16 on projects including transport, education and flood defence.
Councillors insist they can deliver major investments and avoid drastic cuts to key services.
A £5million lump sum from central government as an incentive for freezing tax is equivalent to a one per cent rise.
John Spence, councillor for finance, said: “We were keen to freeze council tax because we represent hard-pressed households across Essex.
“It is our obligation that if we can freeze tax, then we should, and we strive to be a low-tax council.”
The council will dip into its reserves to balance its books for the upcoming year, Mr Spence revealed.
He also said the county’s high tax collection rates - currently 98.3 per cent - help avoid the need to increase rates.
Road investment will include £4million on design and consultation for improving the A120 between Braintree and Colchester and a new north-east Chelmsford bypass.
Nearly £79million will be spent to create 3,000 new primary school places next year, as part of a long-term project to create 12,000 spaces over five years.
Mr Spence said: “We will not shirk from difficult decisions and will maintain our financial disciplines to ensure we provide the support this county needs.”
A final decision on the budget will be made at a full council meeting on February 10.
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