The borough council's cabinet agreed last night to recommend the rise be approved when the full council meets at Telford College next Thursday.
The 1.9 per cent rise – from April 1 – is equivalent to 32p a week for a Band B home, which is the average for the borough.
Councillor Bill McClements, cabinet member responsible for the budget, said: "Together we have had to prepare a budget to fit the many constraints on the council's finances. I would also like to thank all the council's employees for delivering effective services while making £19 million cuts and savings this year."
Councillor McClements said there was a £7 million gap between the money the authority had coming in and the cost of providing services.
He added: "With a 1.9 per cent council tax increase, we can avoid using any balances. We have only got £3.67 million in useable reserves."
Councillor McClements said the budget was focused on bringing money in by encouraging business growth. This includes the £250 million development of the Southwater area.
In response to a criticism by Conservative group leader Councillor Andrew Eade that the council had not accepted a grant, equivalent to one per cent of the council tax, in return for freezing bills, Councillor McClements replied: "Your government has taken £40 million out of Telford & Wrekin in cuts to the council, you've taken £35 million out of the economy in increases in VAT, the cap on benefits will take £5.5 million, the bedroom tax takes £2.5 million, council tax benefits £3 million.
"George Osborne stood up and promised us growth. If you worked out what five per cent failure to grow the economy of the UK is, that means for every person in Britain a £1,200 per person lack of growth. We have 170,000 people here – that's at least £170 million out of our local economy. There's the failure. Sort that out."
Meanwhile Shropshire Council yesterday agreed to freeze its council tax for the next 12 months.