There was a heated debate at the meeting of Skegness Town Council when Coun Adrian Findley put forward a motion to "reinstate the Mayor' s allowance back to its original amount.
Coun Findley said it would "allow less unfortunate individuals to take up the honour of being Mayor of Skegness without forcing them to reject the offer, or financially struggling during their time."
The motion was seconded by a former Mayor of Skegness, Coun Mark Anderson.
This year's Mayor, Coun Trevor Burnham, accepted the chain of office in May with a budget of £2,400 for the year.
Previous Mayor's have received more than double that amount - and have hosted a civic reception after the Mayor Making ceremony, which has raised hundreds of pounds for charity.
However, a decision had been made not to hold this year's reception due to Covid-19 and the budget was cut.
Ahead of the council meeting, Deputy Town Clerk Kate Ford noted the budget for 2022/23 "would need increasing or service cuts would have to be made to accommodate any rise in the allowance".
Coun Daniel Kirk was first to raise objections to the motion. He said: "This is the third time this has been discussed and I find it outrageous that the residents of Skegness should be expected to pay for a slap-up dinner after the Mayor Making ceremony."
Coun Anderson said he was not suggesting the increase should be used to fund the meal.
"When I was Mayor the allowance was £5,000 a year and I paid for the reception myself," he said. "But future Mayor's may face hardship and not be able to afford to do this.
"A Mayor is also expected to wear appropriate clothes and he may need extra funds to put clothes on his back.
"The allowance has not been increased in around 12 years or more and is way behind what other towns get - and what our colleagues receive who were elected to Lincolnshire County Council and East Lindsey District Council."
Another former Mayor, Coun Sid Dennis, suggested that before any decision was made the council should look at how much a rise would cost the taxpayer in the 2022/23 budget.
The current Mayor, Coun Trevor Burnham - who has already attended over 40 events and recently raised more than £1,000 at two charity fundraisers - said he knew from day one that there would be no Mayoral dinner because of Covid-19.
"I did say I would not accept the allowance if they voted for it," he said. "I do agree that Skegness is well behind other towns/parishes.
"Our allowance hasn't change in over 10 year or more.
"I receive £200 every month which to be honest doesn't go far.
"I met a couple of former Mayors last week, one from Barnstaple, who said they received over £9,000 ayear, car allowance and security.
"They must be rich people down there.
"I'm absolutely honoured and privileged to be the Mayor of Skegness. Hopefully at the management meeting we can iron this out for future Mayors."