Council leaders across Scotland are said to be "deeply disappointed" with First Minister Nicola Sturgeon and Finance Secretary Kate Forbes for refusing to intervene in a dispute over local government pay.
Cosla finance spokeswoman Gail Macgregor said the current budget settlement for local government "limits the options" for successfully resolving the dispute.
It came as Unison, the largest local government union in Scotland, started balloting 25,000 council workers over possible strike action.
Unison is balloting school staff, early years workers and refuse and recycling staff - with the warning that strike action could shut schools and nurseries and leave bins uncollected.
The union is recommending workers back such action after being offered a "miserly" 2% pay rise.
While the ballot will go on until July 26, local government body Cosla appealed to Sturgeon and Forbes to get involved to try to end the dispute.
Macgregor said: "Cosla every year argues for fair funding for local government to maintain the essential services our communities rely on.
"No increase in our core funding damages these services and limits the options we have in successfully concluding pay negotiations.
"Refusal to engage in discussion will only see this continue and our communities will see and feel the difference."
Her comments come in the wake of the Scottish Government's recent spending review, which will see cash allocations to councils frozen for the next three years.
But workers are demanding pay rises to help them cope with the increasing cost of living.
ScotRail workers - who are now part of the public sector - have this week been offered an improved 5% wage hike.
Johanna Baxter, Unison's head of local government in Scotland, said the 2% being offered to council staff amounts to real terms cut in wages.
She said: "Local government workers have been offered a miserly 2%. With inflation at a 40-year high this goes nowhere near compensating them for the cost-of-living crisis or the loss in the value of their pay following real terms pay cuts over a decade of austerity.
"This comes on the back of the Scottish Government announcing cuts to public services that Margaret Thatcher would be proud of in their recent spending review."
Hitting out at Scottish ministers she added: "The fact they will not sit down with Cosla and the trade unions to try and find a solution is a kick in the teeth to all local government workers.
"They have forgotten already who was educating our children, cleaning our communities, caring for our vulnerable and burying our dead throughout the pandemic.
"Local government workers keep society running. We have no option left and will ballot 25,000 school, nursery and waste and recycling workers."
The Scottish Government said it is "not involved in local government pay negotiations".
A spokesman said: "Pay settlements for council workers - excluding teachers - are a matter for Cosla and are determined through negotiations at the Scottish Joint Committee (SJC).
"As it is not a member of the SJC, the Scottish Government cannot intervene in pay negotiations, which are for the trade unions to negotiate with Cosla.
"Council staff play a crucial role in our communities as we rebuild the economy following the pandemic. We would encourage the parties to maintain dialogue and stay at the table to reach agreement."
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