Council members gave preliminary approval to bump the current $12.50 monthly fee to $14.50 in what would be the first rate hike since 2002.
A second reading is still needed.
Council discussed the possibility of outsourcing garbage collection to a private company last month.
But outsourcing would only help the town save money if it downsized its public works staff, which is made up of seven full-time and two part-time employees, town manager Van Willis said last week.
Port Royal need to retain its public works employees for other general duties, among them yard debris and large appliance pickup, Willis said.
Council members decided they would rather keep garbage collection in-house.
"We think we do a better job with our own employees picking
up our garbage," Mayor Sam Murray said.
Even with the increase, garbage collection would continue to cost the town more than it collects in fees.
It costs about $16 per month per unit to provide garbage, large appliance and yard debris pickup services, Willis told council members last week.
A $2 increase would generate about $25,000 to $30,000 more a year, Willis estimated.