Both Myrtle Beach and North Myrtle Beach governments are working to bring extra revenue into their city budgets, but the decision would result in a roughly $20 million loss to 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 officials passed the first reading of a series of ordinances this week that would restrict the county from netting their financial gains.
“This is not about the allocation of funds,” City Manager John Pedersen said. “What this is about is who allocates the funds.”
The ordinance stipulates the city would now collect their 3 percent of the current accommodations tax and 2 percent of their 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 amenities like the SkyWheel and other tourist attractions that cost admission, is decreasing by 1.5 percent to 6 percent.
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City officials said the revenue increase from both accommodations and hospitality taxes, which amounts to roughly $13.5 million, 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.
While the vote was unanimous, some took issue with the council’s decision and the impact it could have to I-73.
“In my opinion, and a lot of others opinions, if this were to proceed forward and into the future, this would kill I-73 faster than the Coastal Conservation League is trying to kill it right now,” former Horry County Chairman Mark Lazarus said. “It’s going to take a significant amount of dollars away that we’re already putting towards the implementation of I-73.”
Lazarus stressed that the council’s decision could undo the work Horry County officials have put forth to obtain funding for I-73. He said if the council passes a second reading of the ordinance, it could signal county officials to halt the $1.2 billion they are allocating to the project.
Department of Transportation Commissioner Tony Cox agreed, adding that any action could send “a wrong message” to federal officials funding the project making it appear the city and county are “squabbling.” Myrtle Beach Area Chamber of Commerce president Karen Riordan also requested the council put a pause on the proposal. Both requested a meeting be arranged to discuss the ordinances.
While city officials said the proposed ordinances have nothing to do with I-73, they agreed to sit down with all entities involved with the project for a meeting prior to the council’s second reading.
“It’s not about I-73,” Mayor Pro Tem Mike Chestnut said. “The discussion today is about how you can pledge our money without coming to us and asking us to pledge our money.”
North Myrtle Beach officials unanimously approved on first reading a vote to enact a similar agreement during a special meeting Thursday night.
The city council is proposing to collects its full 2 percent hospitality tax and 3 percent accommodations tax, essentially doubling the money the city is splitting with the county.
City spokesperson Pat Dowling said the council wants to keep their total amount of taxes earned, half of which is collected by the county, to increase revenue that can be used to enhance and expand infrastructure and other aspects impacted by tourism.
“If the two ordinances pass two readings before City Council, the hospitality tax percentage increase would result in an increase in hospitality tax collections of about $2.8 million annually,” Dowling said. “The accommodations tax percentage increase would result in an increase of about $3.5 million annually.”
In June, Horry County Council dedicated hospitality tax money to public safety and I-73 funding. Of the $41 million the county gets from the tax, $23 million would go toward completing the Horry County portion of I-73 and the remainder would pay for public safety.
While he was not chairman at the time of the decision, Johnny Gardner said if the county loses the money it gets from the tax, it would be near impossible to fund I-73. Horry County was expected to pay installments to complete the Interstate for the next 20 years.
“It sounds like I-73 is dead,” Gardner said.
Seventy-one percent of Horry County’s hospitality tax revenue comes from North Myrtle Beach and Myrtle Beach.
Gardner added that council needs to sit down and discuss what Horry County’s next step should be in negotiating with the municipalities.
Horry County Spokesperson Kelly Moore said the County is concerned about the ordinances in Myrtle Beach and North Myrtle beach and is preparing a response to address the issue.