Tuesday's decision puts the resolution on the November ballot, where Tacoma residents will have the final say.
Even before the council voted, the plan sparked controversy because representatives from the utility companies have already said they will pass on any additional taxes to the customers.
"We would have to pass it on," said Chris Gleason with Tacoma Power. "It's really a tax that's imposed on us, which we just pass on to our customers."
Puget Sound Energy officials said the same thing, but many residents, such as Chrysanthe Barnes, said last week that they still plan on voting for the tax increase.
"Isn't there a saying that we always pay for everything? But that would be a great idea," Barnes said.
The Tacoma Public Works department estimates the tax hike would net the city $10 - 11 million every year, which would be earmarked for road and sidewalk improvements, as well as crosswalk safety projects.
Tacoma Public Works estimates that if the utilities pass the tax onto consumers, it could add about $5 a month to each customer's bill.