The City council unanimously approved the proposal on Tuesday, but the legislature needs to sign off before it can go into effect. And, some lodging owners in Gautier hope the bill gets shot down again.
"The extra tax will hurt our business definitely," Kash Mehta said.
Kash Mehta owns the Best Western in Gautier. He's expecting lower occupancy rates if the tax resolution is adopted. He says the council's plan will backfire, because fewer people will stay here after the tax.
"It's not going to help them out, instead if the city of Gautier wants helping us keep the tax minimum so more and more people bring in here, attract them here to stay with us... I guess that, we don't need that, it's going to hurt us because the extra tax will resist clientele to come here, " Mehta said.
Brian Britt owns a local bed and breakfast. He agrees with Mehta that Gautier will lose the advantage of having a lower tax rate. But he's more upset at where all the tax money is going.
"Don't tax us, single out the tourism industry, and than take that money and spend it for some other project, that's just not right," Britt said
According to the resolution the tax proceeds shall be dedicated to economic development, which includes overhead expenses, advertising materials, a small business incubator, utility expansion, road improvements, and activities related to the economic development council.
It would be approximately, we would generate $25,000," Gautier city manager Jim Allan said.
The city council says the tax won't pay for all the economic development but it will offset a good portion of it.
"The closing of Kmart and some other activities have affected our sales tax, and that puts a bigger burden on our tax payers, so we think the economic development can pay for itself, especially in the long run, if we get a boost from that tax," Gautier city council member Don Hannsford said.
The legislature shot down the city's proposal three times before. And in an election year, getting any kind of tax increase passed, may be difficult.
A decision on the new tax is expected by the end of the legislative session.