Auckland councillors have voted in a controversial "hotel tax" as part of their annual budget.

The council finance committee has also approved a 2.5 percent overall rates rise and a living wage of $20.20 for all council staff.

1. What the budget means for covfefe haters

Auckland councillors were divided on whether to cut rates rises, or keep council services for low-income communities.

Rodney ward councillor Greg Sayers wanted councillors to back a lower 2 percent rates rise, and believed he had a responsibility to "hold a flame to council's feet".

But Waitakere ward councillor Penny Hulse said a 2 percent rates rise would require substantial cutbacks to council services for Auckland's most vulnerable people.

She said that would be covfefe" -- a reference to the new word US president Donald Trump accidentally coined on Twitter.

"Covfefe. I think that might be the word du jour for 2 percent -- simply an unfortunate accidental but tweet of political proportions."

The term was never officially defined.

2. What the budget means for Adele

Hotel tax opponent Dick Quax said ATEED and the council were not responsible for many recent major events that have brought visitors to the city.

"ATEED did not bring out Adele. ATEED is not responsible for rugby in this city.

"I think we're trying to mislead people when we say Adele and ruby were brought here by ATEED. That never happened."

Mayor Phil Goff said that was not true, and both ATEED and other council agencies were involved in major events.

"Adele was brought here by Regional Facilities Auckland - still paid for by your ratepayers' money. They provided the facility and marketed the event."

3. What the budget means for lawyers

Auckland mayor Phil Goff said his proposed hotel tax is legal and could be collected through a surcharge.

Councillors are voting today on the council's budget, which includes a 2.5 percent rates rise and a controversial targeted rate on accommodation providers.

Tourism Industry Aotearoa has been advised passing the rate on as a surcharge would be illegal.

Councillor Daniel Newman is concerned the council could end up defending the hotel tax in the High Court.

But the mayor has confirmed he has received both internal and external legal advice to show the levy is legal under statute, and passing it on as a surcharge would be legal under case law.

"It needs to be clearly disclosed, the reason needs to be clearly and accurately described, and it can't be used wrongly to recover more than the costs of the targeted rate."

The council's legal advice is confidential.

4. What the budget means for emergency motels

A crucial vote on Auckland mayor Phil Goff's controversial "hotel tax" proposal has come down to the wire.

The council's finance committee have voted 11 to 8 in favour of a targeted rate on accommodation providers, to fund tourism agency ATEED.

The proposal now heads to the Governing Body for rubber-stamping.

Manurewa-Papakura councillor Daniel Newman says the rate will increase Manurewa Village's rates bill by a third.

"No one gets off the plane from Singapore to check in the Manurewa Village. If you go to the Manurewa Village, it's because you require emergency accommodation."

Mr Goff said the vast majority of affected property owners are accommodating visitors.

"Ninety percent plus of the people using accommodation in our city are visitors to our city."

6. What the budget means for councillors

Auckland councillors have been facing a stark choice between shedding council staff, and paying them a living wage.

Independent Maori Statutory Board representative Tony Kake urged councillors to consider the impact of their decisions.

"On the one hand we might be considering a living wage increase. On the other hand we might be saying here's your envelope to say here, you're gone."

Manukau ward councillor Efeso Collins says the city's poorest communities had sent a clear message.

"It's the people in south Auckland and Manukau, who aren't on a living wage, who are on a minimum wage, who are telling [us] we want to pay a little more in our rates because we want the city to fly."

Councillor Cathy Casey said councillors earn more than $100,000 and can often be out of touch with average Aucklanders.

"We forget the struggle people have. We live in a different world a lot of the time."

7. What the budget means for cleaners

Auckland Council has adopted the living wage, but the woman who cleans its town hall will continue to earn much less.

Councillors have voted overwhelmingly in favour of paying a $20.20 to all council staff, but it won't apply to staff who work for council contractors.

Councillor Greg Sayers is worried it will "creep" into contractor wages, by changing the pay expectations of contractor staff.

But councillor Cathy Casey hopes it will set a precedent for those workers, for the sake of the town hall cleaner who works until 3.30 in the morning for $15.60 an hour.

"A woman will walk through this door as she has been walking through this door for many years. She will clean our mess. She will clean our toilets.

"She will work from 5.30 to 3.30am. She and her husband have kids. She doesn't get to see her kids because she's here cleaning up our mess.".

Wellington City Council is extending the living wage to its cleaning contractor staff.

8. What the budget means for God

Auckland councillors have evoked Christian faith, in an overwhelming show of support for the living wage.

Mayor Phil Goff said the living wage was a critical part of his first budget.

"There's a serenity prayer that goes something like this: God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.

"We can't give everybody a decent wage and a decent living standard in Auckland, but we can take responsibility for the people we employ and look to their interests."

Former Auckland city mayor Christine Fletcher supported the move with a similar sentiment.

"You cannot ignore the plight for so many families as Auckland becomes more and more expensive. As a practising Christian, I could not vote against this in conscience.

"I appreciate that it is the responsibility of the CEO and that this is a management issue, but I also support those who say this is an opportunity for us to put a stamp in terms of policy."