Coronavirus is costing councils more than £30m a month in lost income, according to the leader of the Welsh Local Government Association.
Andrew Morgan says the impact on councils has been “huge”.
The UK government has announced extra funding for English councils, and says the Welsh Government will get £95m as a result.
The Welsh Government welcomed the funding and said it would be used to support public services and businesses.
When the UK government spends money on devolved areas, like Saturday’s local government announcement, that £1.6bn package generates funding for the Welsh Government via the Barnett formula – the mechanism for working out the share Wales should get.
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It is up to Welsh ministers what they spend the money on.
Mr Morgan, who is also the Labour leader of Rhondda Cynon Taf council said the revenue councils are missing out on includes income they normally generate from leisure centres, planning fees, parking income, rent of property, school dinner income and theatres, while costs have risen elsewhere.
Many council tax and business rate payments have also been deferred.