Horry County looks to reduce spending by $73 million due to the coronavirus
Horry County could reduce spending by $73 million in the coming fiscal year due to the coronavirus-related economic downturn.
County council voted 10-2 on Tuesday to approve the second reading of the fiscal year 2021 budget with additional cost-saving measures. Council Members Paul Prince and Tyler Servant voted against the budget over concerns the business license fee would still be too high given the economy.
“It’s a struggle out there to stay in business even without a business license fee,” Prince said.
In April, council approved the first draft of the budget that proposed a $51 million cut on spending. Employee raises were canceled and a hiring freeze was put in place, but no furloughs or layoffs are planned.
“The FY21 budget funds our existing services at their existing levels,” Horry County Assistant Administrator Barry Spivey said.
Capital improvements
Cut in spending are largely coming from delaying capital improvement projects that are necessary in the long-term as the county grows, but don’t need funding in the short-term while the economy is still in rough shape. Horry County had a budget of $532 million in fiscal year 2020 but now expects to spend $459 million in the coming fiscal year beginning in July.
Most of the additional savings come from delaying a terminal expansion project at Myrtle Beach International Airport.
That project would have allowed more flights to come to Myrtle Beach, but delaying the project will save the county $20 million in the upcoming budget.
The airport is suffering due to a lack of travelers the last couple of months. Once travel picks back up, the project will be reconsidered.
“Long-term this is a valuable asset to our airport operation, but the recommendation currently is we delay this until a more favorable financial environment,” Spivey said.
Business license
A second major cutback is reducing the revenue from the business license fee by $2.3 million to help support small businesses struggling to make ends meet while recovering from the pandemic.
The expected revenue for the business license fee was raised by over $4 million in 2019, mostly in an effort to save the parks and recreation department without more of a tax increase.
Reducing the fee’s revenue means the cost to get a business license will decrease for the coming year. The license is required to do business in the county and its cost differs based on the type of business and amount of sales.
This year’s revenue reduction cuts last year’s increase in half, but the business license fee will still be higher than it was in 2018. Council Members Prince and Servant said the amount of revenue from the fee should go back to where it was before last year.
Servant said after the meeting that he believes it’s the government’s job to stay out of the way of the private sector, and he sees the business license fee as getting in the way of a struggling economy.
“Horry County has an unemployment rate of 38.65 percent. Business and the workforce are struggling,” Servant said, adding that the local unemployment rate is higher than the national unemployment rate during the Great Depression.
Council Member Harold Worley said lowering the amount of revenue from the fee will help the business community without completely undoing the progress made during last year’s budget retreat.
“We are not raising it, we are lowering it. We are not going all the way back, we are going partially. This is the right thing to do,” Worley said.
In addition, the deadline to pay a business license renewal fee was moved back to May 31.
What’s next?
No one spoke at public comment for the budget’s second reading on Tuesday, but there will be a another chance to do so on third reading. County staff will continue fine tuning the budget ahead of the next council meeting on June 2.
While the proposed budget would delay many improvement projects, Horry County could completely amend the budget later in the year after its adoption if the economy improves.
“Once we get past this COVID-19 issue, we hope to come back to council with where we are and make an assessment of what is needed for growth,” Spivey said.
