Deputy leader of South Holland District Council says funding challenges facing drainage boards "cannot be underestimated"
It comes as the three districts facing the biggest levy increases this year are all in Lincolnshire.
Communities at the highest risk of flooding face cuts to key frontline services due to a sharp rise in the cost of local defences, councils have warned.
There are calls for the Government to overhaul the way bodies which oversee flood alleviation in the lowest-lying areas are funded as current arrangements risk penalising nearly a million households who already pay to maintain flood defences through council tax.
Internal drainage boards have seen their costs increase by an average of 28% since 2022-23, largely as a result of higher energy and fuel prices, increasingly extreme wet weather events and wage increases, according to the District Councils' Network (DCN).
Currently district councils, or unitary councils in some areas, collect levies on behalf of the boards, which are small public bodies.
There is a legal requirement for councils to pay the levy charges once agreed, but there are Government restrictions on annual council tax rises.
Therefore, councils are unable to increase bills to cover drainage boards' extra costs, meaning less money is available to pay for services and invest in housing and economic growth.
Taxpayers in affected areas face an overall flood protection bill this year of £50 million, paid primarily through council tax and landowner levies.
The three districts facing the biggest levy increases this year are all in Lincolnshire.
East Lindsay will see the levy rise by 35% to £1.37 million, followed by Boston and South Holland with increases of £700,000 and £600,000 respectively.
For Boston Borough Council, the drainage levy makes up 22% of its £12.76 million annual net budget.
The authority collects £4.33 million in council tax, of which 61% goes on the drainage levy.
The DCN said that while overall high energy costs are driving financial pressures, standing charges for energy regardless of how much is used are particularly costly for pumping stations that are used infrequently, but are vital at times of heavy rain.
For example, the Middle Level Commissioners, which manage water levels in the Fens, is said to be facing a 509% increase in its standing charges.
The DCN said potential solutions could include the Government funding the full costs of drainage boards to councils as a relatively small proportion of authorities are affected.
Other suggestions include the removal of the council tax cap to generate for funding or new legislation to remove levies from council tax bills.
Sam Chapman-Allen, DCN chairman and Conservative leader of Breckland Council, said: "It is only by properly funding flood prevention that defences can be maintained over vast swathes of the country and we avoid catastrophic flooding threatening life and livelihood.
"Internal Drainage Authorities have little option but to pass their higher costs onto councils - and in response councils have no choice but to further cut back on the local services which are vital for supporting local communities and growing local economies.
"The areas affected are the homes and workplaces of millions of people, and are vital for in achieving our national priorities - growing our economy, building new homes and enhancing food security.
"We urge ministers to work with us to ensure those living in areas at risk of flooding are not unfairly penalised through the form of higher tax bills and a reduction in the services upon which we all depend."
Paul Redgate, chairman of the Local Government Association Special Interest Group for Drainage Board Levies and deputy leader of South Holland District Council, said the funding challenges facing drainage boards "cannot be underestimated", with the impact on councils having "intensified dramatically" in recent years.
He added: "The embedded cost is one that our councils simply can no longer afford. Its impact is becoming more significant every year that passes and it is not going to go away. We need the Government to listen and work with us to deliver a long-term solution at pace.
"Councils are already in a precarious position on the services they can afford to provide and have difficult decisions to come."
A spokesperson for the Department for Environment, Food and Rural Affairs (Defra) said: "Protecting communities around the country from flooding is an absolute priority for this Government, which is why we will be launching a Flood Resilience Taskforce to turbocharge the delivery of flood defences, drainage systems and natural flood management schemes.
"The government will also take steps to ensure we are building more high-quality, well-designed, and sustainable homes and creating places that increase climate resilience and promote nature recovery."
Defra, local authorities and the Internal Drainage Board sector are currently involved in a review of current costs.