’Stop pushing I-73 and move on’: Emails question county’s hospitality tax strategy

Two current Horry County Council members and the previous chairman believe the county’s recent decision to continue collecting the 1.5 percent hospitality tax in North Myrtle Beach and Surfside Beach is producing an undue burden on the business community — and one went so far as to say “I-73 is dead,” according to emails obtained by The Sun News.

“Now that I-73 is dead and off the table, what is there to argue about?” wrote council member Harold Worley, referring to a long coveted interstate that would serve as a major pipeline to and from Myrtle Beach. “County Council should stop pushing I-73 and move on.”

The emails started Sunday afternoon when former Horry County Council Chairman Mark Lazarus sent an email to attorney Henrietta Golding, who represents the county in a lawsuit filed earlier this year by the City of Myrtle Beach. As a business owner, the county’s decision was confusing, Lazarus wrote.

In separate emails, council members Johnny Vaught and Worley agreed. Most county council members, interim administrator Steve Gosnell, county attorney Arrigo Carotti and officials from North Myrtle Beach and Surfside also received the emails.

“What are we in Surfside and NMB supposed to do now? Mass confusion for the business community. While you know i respect your direction and decision i think this adds burden to our business and flies in the face of the judges order,” Lazarus wrote.

The confusion started June 21 when Judge William Seals ordered Horry County to temporarily stop collecting the hospitality fee in the “City of Myrtle Beach, For Itself and a Class of Similarly Situated Plaintiffs.” While not a final decision, it was the first major ruling in a lawsuit Myrtle Beach filed against Horry County over who will collect the hospitality fee.

North Myrtle Beach and Surfside Beach also passed similar ordinances earlier this year to begin collecting the entire hospitality fee starting July 1. North Myrtle Beach Spokesperson Pat Dowling said Saturday his city believes it is included in the judge’s order favoring Myrtle Beach and protected from Horry County’s collection.

Horry County has its own opinion. In a special meeting Saturday, when Golding met with council in executive session, Horry County Council announced it would continue collecting in the municipalities.

Until Judge Seals clarifies the order, Horry County, North Myrtle Beach and Surfside could simultaneously try to collect the hospitality fee if nothing changes before the taxes are due in late August.

The emails

“I totally cuncur, mark!” Vaught wrote Sunday afternoon in a reply to Lazarus’ email.

Vaught told The Sun News he agreed with Lazarus as a business owner who was concerned by Horry County Council’s action.

While Vaught said he is going along with the majority will of council in light of Saturday’s meeting, he said it is his personal opinion that Horry County Council will not be able to continue collecting the fee. He thinks the court will soon clarify the ruling and include the other municipalities.

“I think the intent of the judge’s rule was to include those other municipalities,” Vaught told The Sun News. “I think it creates a hardship on businesses, so that’s why I concurred with what Mark said. They’re going to have to rest their cash registers and I’m sure once the cities come back to the judge, I think the judge is going to rule in their favor, the ones left out of the ruling.”

Chairman Johnny Gardner said he supports the direction council took Saturday. Judges are intentional with their wording, Gardner said, and Myrtle Beach is the only plaintiff in the case.

Worley said he wishes this could have all been avoided, but he thinks the judge did not mean for Horry County to continue collecting the fee at this time.

“I believe our Municipalities should be allowed to collect their 1% and use as they think appropriate, the County like wise should be allowed to collect their 1-1/2% in the unincorporated areas and use as they think appropriate,” Worley wrote in the emails.

Lazarus reached out to Horry County attorneys and council members as a concerned business owner who is worried about what this decision will do to the business community during peak season, he said.

“I was talking to a small business owner recently. Now they have to figure out how to go in and change their systems. What do they do? Here it is July, our busiest time of year and they’re putting this burden on business community,” Lazarus told The Sun News. “It’s just not right. It is all of a result of Myrtle Beach filing a crazy lawsuit against Horry County, which could have been worked out in more amicable terms.”

I-73 future

The future of I-73 is potentially at stake.

Lazarus thinks Horry County needs to take a step back and revisit what the judge’s order says Horry County can legally do. While he doesn’t like the judge’s decision or the fact that Myrtle Beach is suing, he thinks the bigger picture here is getting funding for I-73.

Last summer under Lazarus’ chairmanship, Horry County entered into an agreement to pay for a portion of I-73 using the hospitality dollars. He said he believes this was a completely legal move to increase job-bringing infrastructure to the region. Council recently voted to delay the agreement until October at the earliest.

Earlier this year after Myrtle Beach filed the lawsuit, Horry County Council offered to collect the fee but divide it among the municipalities while moving forward with the plan to build I-73. This offer was a best-case scenario for all parties, and it’s unfortunate the municipalities did not agree to it, Worley said.

“Myrtle Beach and the municipalities would have gotten more money and I-73 would have gotten its funding,” he said. “But with the municipalities collecting 1 percent and losing the half percent, the funds will not be there to support I-73.”

In previous statements, Myrtle Beach Mayor Brenda Bethune has said Myrtle Beach’s intention is not to kill I-73, but instead protect its residents and their money.

But for Worley and Gardner, I-73 doesn’t appear to have much of a future. The fighting within Horry County has likely killed the road project and council likely doesn’t have enough votes to move forward, Worley said.

Gardner agreed that the current campaign to fund I-73 can’t move forward without any local funding.

“It is dead,” he said.

This story was originally published June 30, 2019 at 8:26 PM.