Congressman Tom Rice talks about the I-73 road project
Myrtle Beach officials stressed their support for the development of Interstate 73 while simultaneously passing a set of ordinances that would net the city millions in revenue at the expense of Horry County.
Following the expiration of a 20-year agreement in Myrtle Beach that allowed the county to collect a portion of the city’s hospitality and accommodations taxes, Myrtle Beach City Council unanimously passed the second reading of a series of ordinances Thursday morning that would restrict the county from netting the city’s financial gains.
City spokesperson Mark Kruea said the city stands to collect roughly $15 million annually from the tax revenue. Officials also specified the new measures as a reallocation of funds, not a tax increase.
“It’s time to move on and we need to make sure the city can collect appropriate taxes as permitted by state law and that this tax money that is generated within this city be collected within the city for the benefit of the citizens of the City of Myrtle Beach,” Mayor Brenda Bethune said. “Our sole focus for the use of the money is for the benefit of the citizens.”
The ordinance stipulates the city would now collect its 3 percent of the current accommodations tax and 2 percent of its hospitality tax. While the hospitality tax is decreasing by 0.5 percent, the accommodations tax will increase by the same amount. However, the admissions tax, which is levied on tourist attractions that cost admission, is decreasing by 1.5 percent to 6 percent.
City officials said the revenue increase from both accommodations and hospitality taxes will be used to finance operations and maintenance, including police and fire services. The revenue also will be used to provide local funding for highways, roads, streets and bridges that will provide access to tourist destinations, such as the I-73 project.
However, part of the tax money the county was collecting from the city already was geared toward financing I-73. Now, county officials are unsure if they can financially support the project despite the city’s optimism that the municipalities can work together to negotiate a deal.
Horry County Chairman Johnny Gardner told The Sun News the actions of Myrtle Beach and other coastal municipalities make it look like the current deal with the S.C. Department of Transportation is done.
While Myrtle Beach passed the second reading of its ordinances, Surfside Beach and North Myrtle Beach officials have only passed the first reading of similar measures. If all three governments pass second readings, it would result in an over $20 million loss to Horry County.
County officials say 71 percent of its hospitality tax revenue comes from North Myrtle Beach and Myrtle Beach.
If the county loses the $41 million it gets from the tax, Gardner said, it would be near impossible to fund I-73 with $23 million allocated toward completing the county’s portion of I-73. Horry County was expected to pay installments to complete the interstate over the next 20 years.
“Our pool is going to drain down to at least $12 million,” Gardner said. “You can kiss I-73 goodbye, in my opinion. I hope not, we all want it.”
While Myrtle Beach City Council discussed a plan to collectively fund I-73 during their special meeting on Thursday, Bethune debunked statements claiming the city is “killing I-73” and won’t fund the project.
“That information is not based on fact or any statements that this body has made,” Bethune said. “It could not be further from the truth. Every member of this body has publicly stated our support for I-73.”
With the ordinances going into effect on July 1, city officials suggested the county provide $9.8 million toward funding I-73 while the city would contribute $7.5 million. Bethune said city staff has been “working diligently” to look for possible funding solutions.
Gardner said the county is going to have to think “real hard” about what it’s going to do next to protect its funding, but did not offer any specifics at this time. County officials met in a private executive session on Tuesday to discuss potential next steps, but those conversations were not public.