Councillors have been accused of putting their own interests first after voting for a 31% increase in allowances.
The rise went through by 17 votes in favour to 11 against with three abstentions.
An Independent Remuneration Panel recommended the rise in the’ Basic Allowance from £5,953, which it has been since January 2015, to £7,792 a year.
The panel said it should be increased to compensate working age councillors to fulfil their duties, and encourage a wider range of people to stand.
But opponents said they should not line their own pockets when frontline services are being threatened by funding cuts, and council tax went up by 4.9% this year.
John O’Connell, chief executive of the TaxPayers’ Alliance national campaign group said: “Local taxpayers have every right to be disappointed.
“At a time when difficult decisions are having to be made across the public sector, councillors must retain their moral authority when it comes to keeping costs down and should have shown restraint when it came to their allowances.
“Taxpayers want their hard-earned cash to support essential front-line services, they do not want it go into the pockets of their local representatives.”
Councillor Paul Thompson said after the meeting: “Its disgraceful. I can’t look members of the public in the face when you do that knowing fine well that we are cutting frontline services.”
Coun David Riddle of Putting Hartlepool First called the decision immoral.
He said: “We are talking about an issue where it’s selfish. It is people lining their own pockets.”
During the meeting, he said the issue should be deferred until Hartlepool’s council tax was on par with that of the other Tees Valley authorities.
Angry members of the public who attended the meeting expressed their views.
Comments directed at councillors included “think of Hartlepool, not your pockets”, “you should be ashamed of yourselves” and “disgusting”.
One man said: “You are taking food out the working man’s mouth.”
Hundreds of people also commented on the issue on the Mail’s Facebook site, many against the move.
Council leader Christopher Akers-Belcher told the meeting the rise was about valuing the role of a councillor.
He said: “The majority of councillors work incredibly hard and I would like to see the opportunity afforded to everyone regardless of social background.”
The decision means the council, which is facing £10m funding cuts over the next three years, will have to find an additional unbudgeted £73,000 this year, and £74,500 next year.
Coun Akers-Belcher said the allowances increase could be funded by £250,000 recurring savings from Hartlepool’s contribution to the Tees Valley Combined Authority, and the scrapping of some council special responsibility allowances and phone and subsistence expenses.