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Horry County offers next steps on hospitality fee, I-73 negotiations. Here’s how that may work

I-73 funding depends on local municipalities working through tax allocations

Myrtle Beach City Council passed a motion Tuesday morning in support of I-73 and intergovernmental negotiations to fund the project from jurisdictions directly benefiting from construction of the interstate.
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Myrtle Beach City Council passed a motion Tuesday morning in support of I-73 and intergovernmental negotiations to fund the project from jurisdictions directly benefiting from construction of the interstate.

Horry County Council has a plan to move forward on who will collect the hospitality fee in Myrtle Beach, and it wants it to all be done publicly.

At Tuesday’s meeting, the Council voted unanimously on a resolution to continue collecting the 1.5 percent hospitality fee, but dividing up the $40 million it generates annually. The offer would give $18 million to the construction of roads, notably I-73, with the county taking $9.8 million. The rest of the revenue would be divided up amongst the municipalities.

The issue has been brewing for months, starting with Myrtle Beach and regional municipalities passing ordinances to reclaim hospitality tax money collected in their areas. Then, in March, Myrtle Beach sued Horry County over its uses of the hospitality fee.

Council also went into executive session Tuesday to receive legal advice regarding the lawsuit. It hopes the offer brings an end to the issue by making everyone better off.

Horry County Chairman Johnny Gardner said the plan gets the most amount of money to all areas of the county.

County Finance Director Barry Spivey said if the municipalities start collecting their own hospitality fee, the whole county loses out due to a reduction in the fee percentage and what it applies to.

“That would actually be less than current collections by 13.5 million dollars,” Spivey said.

According to the resolution, the remaining $29 million will be divided up amongst the municipalities based off where it’s collected. In this deal, Myrtle Beach could expect to collect 60 percent of the money remaining. The municipalities would have control over where that money goes once it’s in their possession.

In addition, $9 million already in the bank would be dispersed to the county and the municipalities. Council Member Tyler Servant said this is a good-faith addition to the original motion.

Gardner is instructed in the ordinance to deliver the offer to the municipal leaders in negotiations over the fee, according to the resolution. And the Council voted unanimously for those talks to be public.

“If we go with the plan, we can have money for I-73, public safety and the municipalities get more money,” Gardner said.

Council Member Al Allen said the county has done a good job building major roads through Horry County, and it is time for the other governments in Horry County to “get some skin in the game.”

Allen said every road was in danger of closing or did shutter during the flooding following Hurricane Florence in September. He suggested addressing the crossings of rivers in Horry County to make sure evacuation routes are safe before building I-73, which is billed as a safety road.

“If we have another road, we need to fix our roads internally first … that’s just plain common sense,” he said.

Horry County Council Member Dennis DiSabato said I-73 will help promote jobs that will keep young people in the area and give public safety better mobility. He said the county’s plan accomplishes the goals of local governments. He agreed with Allen that improving local roads first can help improve safety and mobility.

“I would hope the cooler heads would prevail,” he said.

Gardner said working out the hospitality fee collections is the priority. Once that is settled, he said, then there can be discussions on how the money is used.

Per hospitality fee regulations, the money must go toward tourist-related expenses. This can include roads, public safety and infrastructure.

At a previous County Council meeting, outgoing Assistant County Administrator Justin Powell said the council will be briefed at the upcoming budget retreat on how much of the money could go to public safety. As of now, he said, roughly $9 million can be justified going toward tourist-related public safety.

Council Member Gary Loftus said if Horry County funds its portion of I-73, it’ll show Washington, D.C., and Columbia that Horry County is serious about building the road.

“If we don’t show skin in the game, they’re just going to go right past us,” Loftus said.

Horry County Council expects an update in two weeks to hear if the municipalities accept the deal proposed by council. If they do not, Worley said Horry County would consider terminating the I-73 agreement with SCDOT.

“I can’t think of anything better for the cities of the county,” Gardner said. “It has got to be resolved no later than April 16.”

Gardner said he is open to revisions from Myrtle Beach and the municipalities and hopes this is a good start.

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