The Green Party in Brighton have called for a Council Tax referendum in their own area. This appears to be replicated in other areas, and may well be a national Green Party policy for all I know. If so, it is an interesting comment on that party's supposed commitment to localism.
I think a Council Tax rise of not more than 2% is a viable idea. but a referendum would be counterproductive.
The reason is that Eric Pickles, with his usual mendacious cunning, has rigged the system. The apparently democratic option of a referendum is skewed as the wording of the question is so biased. Any Council putting forward the question would have to ask "Do you agree with X Council's unreasonable Council Tax rise?" Asking that question is more or less bound to give the answer no. This is well known to opinion pollsters who go to great trouble to "frame" questions to give a fair result. The Pickles wording is obviously designed to give the answer that Eric Pickles wants _ no.
It gets worse, once you understand the mechanics of Council Tax collections. The legal notification of the Council Tax you have to pay gets sent out within a few days of the Budget being passed, and has to by law. The referendum would have to be held after this date. If the answer came back no, the Council would have to re bill each Council Tax payer, creating a hugely expensive administrative disaster. It would probably also confuse some taxpayers as they would have had two different versions of the Council Tax bill.
I have no doubt that Eric Pickles would also claim such referendum results as an endorsement of his own no rise position, and his determination to lock local government into continued financial decline.
A rise of less than 2% does not trigger a referendum, and has been adopted by many Councils across the UK. This is because continuously declining Council revenues are bringing the famous Graph of Doom closer and closer to reality. I was interested that Theresa May recently blocked a lowering of the threshold as she can see how much damage it would do to Police budgets.
Of course, the Council Tax system is fundamentally broken, and will have to be reformed at some point, but referendums are simply a trap created by Eric Pickles.