The Birmingham City Council approved a $3 per room, per night lodging tax on Tuesday after a heated debate.

The measure was approved in a 5-3 vote, with City Council President Valerie Abbott and council members Hunter Williams and Darrell O’Quinn opposing the measure.

Money from the tax will be used for sports, tourism and infrastructure improvements.

“We need the resources -- bottom line -- if we’re going to grow our city’s economy,” said Birmingham City Council President Pro Tem William Parker.

Parker said he expects the tax to generate $4 million in revenue per year.

“This provides us an opportunity to do something about our aging infrastructure,” District 8 council member Steven Hoyt said. “We need to clearly define how these dollars are used.”

While many city council members and hotel industry representatives were eager to discuss how the revenue is going to be spent, O’Quinn pointed out that there is also the potential for a $4 million loss in revenue by sending business to other cities with a lower tax.

Birmingham’s current lodging tax is one of the highest in the country.

The flat tax is on top of the current 17.5% lodging tax rate - comprised of a state lodging tax rate of 4%, Birmingham lodging tax rate at 6.5% and Jefferson county’s lodging tax rate at 7%, according to the Alabama Department of Revenue. If a hotel room costs $100, current lodging tax rates would make it total $117.50 before the proposed $3 increase.

The average lodging tax for the 50 largest cities in the country is about 13.6 percent, said Mindy Hanan, president & CEO of the Alabama Restaurant & Hospitality Association.

“Meeting planners have limited resources when they’re choosing to come to a city,” Hanan said. “They can go somewhere else and it’s a lot less and they’re getting more for their dollar.”

Many from the hotel industry and some city councilors opposed the $3 flat rate calling for a 1.5% increase instead. They were wary about raising Birmingham’s lodging tax rate over 20%.

“Twenty seems to be the magic number with meeting planners,” Birmingham Marriott general manager Chris Townsley said. “Stay below 20% (tax rate) and you don’t get much push back.”

While most individuals don’t consider tax rates when booking a room, most conventions and large groups do.

“What are we doing from an infrastructure standpoint that’s going to attract these types of groups?,” Townsley said.

This story was updated to show the vote was approved by five council members.