Cuts of £1.4m for the 2011/12 budget have been approved by Sedgemoor district councillors.
The Conservative-run council proposed town and parish councils pay for the running of town halls, although this transition will cost £180,000.
A total of 12 posts will be cut from its workforce of 391 people. CCTV coverage will be cut by £150,000.
The Somerset council hopes to use £450,000 from reserves to make up funding for the next financial year.
Councillors expected a funding shortfall of £1.4m but its settlement from the government left a shortfall of £1.8m.
'Lack of support'
The remaining £400,000 was paid out using the council's balances.
A spokesman from the authority said the £1.4m was 8% of its net annual budget.
At the meeting, councillors also decided to freeze the authority's share of the council tax bill.
The leader of the Labour opposition at the council, Councillor Kathy Pearce, said: "I'm concerned that it's a short-term budget which is about cutting services rather than finding an innovative way to bring business to the town.
"There's also a lack of ongoing support to voluntary agencies who are struggling with reduced funding."
She said she believed more funds should have been put aside to continue the Bridgwater Retail Initiative to encourage more business to come to the town and for better core funding to voluntary agencies.