The place making program, funding projects in small towns, has run its race, according to mayor Danny Goss.
Cr Goss confirmed it had been cut from the draft budget but emphasised "that's not to say it won't come back."
He justified the cut as no longer fitting with council's "plan, design, deliver" model.
However, when asked if this put smaller and remote communities at risk of being forgotten and missing out, Cr Goss said East Ward councillors were all over issues in smaller towns.
Instead, he urged residents of small towns to be proactive by making budget submissions or taking part in the community grants program.
"It was a very successful program over a long period of time.
"I'd rather the community get behind a project rather than say here's the money, you have to spend it," Cr Goss said.
Shire infrastructure and assets manager David Hair said the amount allocated to communities had restricted project opportunities.
"When they've gone through the process, it's become very limiting in terms of what they've actually asked for as opposed to what they've got," Mr Hair said.
The place making program was a community-led initiative where small towns collaborated with council to develop projects to add to the physical and social character of the community.
Last year's budget allocated just above $155,000 to three projects in Poowong, Brandy Creek and Longwarry.
Previous projects included a toilet block at Aberfeldy, playground at Darnum and oval works at Labertouche.