I-73 funding depends on local municipalities working through tax allocations
Myrtle Beach City Council continues to express its support for the development of I-73 and intergovernmental negotiations to fund the project despite comments made by Horry County officials proclaiming the project is a dead deal.
“I do think I-73 is a very vital highway to come to this area,” Councilman Mike Lowder said at Tuesday’s city council meeting . “To say that we killed I-73 is so false.”
As ordinances are being passed in Myrtle Beach, North Myrtle Beach and Surfside Beach to reallocate the county’s share of accommodations tax and hospitality tax into their own municipal budgets, the future of I-73 remains a concern for the county as they stand to lose over $20 million a year.
With agreements made last summer to build I-73, county officials anticipated funding their portion of the interstate project with the $23 million they received in accommodations tax, and also pay installments to complete the interstate over the next 20 years.
A 20-year agreement, that is now expired, permitted the county to collect a portion of the city’s hospitality and accommodations taxes. Now, municipalities are restricting the county from netting the financial gain with each collecting its 3 percent of the current accommodations tax and 2 percent of its hospitality tax.
However, Myrtle Beach officials feel I-73 is still a possibility as long as every government that would directly benefit from the construction of the interstate enter into negotiations to formulate a funding plan.
“We are not here to place blame that things weren’t done properly,” Mayor Brenda Bethune said. “We want to move forward, we want to show our support but we want to do it in a proper manner and this ensures that happens.”
With Myrtle Beach expected to bring in $15 million annually in tax revenue, Chief Financial Officer Mike Shelton suggested the city could contribute $7.5 million toward funding I-73 while the county could provide $9.8 million. Shelton said the remainder of the city’s tax revenue would maintain roads, highways, operations and infrastructure.
Shelton stressed the need to maintain infrastructure. If vacationers don’t have a good experience, they won’t come back or encourage their family and friends to visit the area, he said.
“What we believe our option does is not only continue the city’s support toward the debt service for I-73 but also provides meaningful revenues to allow the city to continue to create and maintain a good vacation experience for those people who come here and a good living environment for those who live here,” Shelton said.
“We believe that in more ways than one this option shows the city’s support for I-73 and tourists.”
City officials also want to pay off the debt accrued from I-73 over a 30-year period instead of 20 years.
“We think that for an asset that has a long life as an interstate highway, it makes sense to pay that debt off over a 30-year period and to maintain a significant amount of revenue related to the additional business that the interstate would bring in,” Shelton added.
City Manager John Pedersen said no agreements have been made yet but encouraged Myrtle Beach officials to begin negotiations with the county and neighboring governments.
While Myrtle Beach passed its final reading of the tax ordinance last week, North Myrtle Beach and Surfside Beach have only passed first readings. Surfside Beach is expected to vote on a second reading at its council meeting Tuesday night.