The Discover Niagara Shuttle has plans to expand its routes, if the money can be secured.
The shuttle runs along the Niagara River during the tourist season, and it will begin its third year of service in May.
Officials say new routes could connect Niagara Falls visitors to Lockport and North Tonawanda in 2019.
Increases in the bed tax charged at local hotels and motels would pay for the expansion, said Sara Capen, executive director of the Niagara Falls National Heritage Area, the federal agency that operates the shuttle.
The Niagara Falls City Council on Wednesday voted unanimously to ask the State Legislature for permission to raise the city's tax on hotel and motel bills from 5 percent to 6 percent, with the revenue from the increase earmarked for the shuttle.
The Niagara County Legislature recently made a similar request to Albany. The county charges a 4 percent tax at hotels and motels outside the cities of Lockport and Niagara Falls, and it wants to increase that to 5 percent for the shuttle's benefit.
Lockport Mayor Anne E. McCaffrey said she expects a vote soon to ask the state for a city bed tax increase from 4 percent to 5 percent.
Grants from the New York Power Authority and local governments have financially supported operations. Finding a dedicated funding source would lead to improved service.
"That has been the goal, to find a dedicated funding source," Capen said. "We're looking forward to this opportunity. It's really important to expand the route to North Tonawanda and Lockport."
Councilman Christopher P. Voccio, the lead sponsor of the bed-tax increase in Niagara Falls, said he hopes more funding will lead to more shuttle stops in Niagara Falls, as well as in outlying communities.
"We want that family from Omaha, Neb., or Johnstown, Pa., to stay not just one night, but many nights," Voccio said.
Niagara Falls City Controller Daniel R. Morello said that based on last year's city receipts, a 1 percent increase in the bed tax would bring in about $680,000 for the shuttle.
A 1 percent increase in the county bed tax would yield about $50,000, said County Treasurer Kyle R. Andrews.
A Lockport increase would garner $20,000 to $25,000 for the shuttle, McCaffrey said.
The shuttle service now has a budget of $750,000, Capen said. It has a 15-stop route in Niagara Falls, Lewiston and Youngstown. This season, two more stops will be added: Academy Park and the Stella Niagara Preserve, both in Lewiston.
Nearly 70,000 rides were taken on the free shuttle in the first two years of its existence.
If the State Legislature approves the tax increase requests, the money wouldn't come to the shuttle until 2019. Capen said that gives her this year to work out routes and timetables for service to Lockport and North Tonawanda. She said service is likely to be offered only from Friday to Monday, and would cost an estimated $200,000 for each city.
"We believe this is an incredible opportunity to bring tourists to Lockport to enjoy our attractions on the Erie Canal," McCaffrey said.
North Tonawanda Mayor Arthur G. Pappas said no one has approached him about the new service. North Tonawanda does not charge a bed tax.
The shuttle currently uses four vehicles owned by Niagara Majestic Tours. Capen said a request for proposals would be issued for vehicles to run the routes to Lockport and North Tonawanda, which probably would require two more vehicles each from a private operator.
"We're not buying vehicles," Capen said.