Mayor Chalermlak Kebsub requested seven million baht from the council but the council - which consists mostly of her political opponents - voted that the amount should be substantially reduced.
At least 30 floats are expected to take part in this year's parade along beach road.
The tent city of stalls selling food and souvenirs along the Patong shorefront is no longer permitted because of a ban on commercial activities on the beach and beachfront.
Sunbeds and umbrellas have been cleared from the sand and vendors are not allowed to store any equipment under the trees.
The number of tourists visiting Patong's walking street, Soi Bangla, is well down on previous low seasons. Some operators are wondering whether the island's holiday hub has priced itself out of the market.
Back on the agenda in Patong is the changing of the direction of the one-way system, an idea that would deliver tourists to the beachfront instead of having to loop the city first.
The new dolphins water feature and the large shorefront 'Patong City' sign would then be seen as tourists arrive rather than as they depart.
The 29th Patong carnival, which officially launches high season, runs from November 1-3.
The Patong one-way loop is not expected to reverse direction before then.