We now know how badly COVID hurt Horry County’s annual budget
The COVID-19 pandemic, which began walloping Horry County nearly a year ago, has taken a toll on the budgets of local governments in the Grand Strand, in addition to its toll on businesses and the people who live here.
For the first time Friday, Horry County officials revealed just how seriously the pandemic has hurt the county financially.
At a daylong retreat focused on work-shopping the 2021-2022 county budget, Barry Spivey, an Horry County assistant administrator, reported that the county took a hit of $22.3 million as a result of the pandemic.
In total, though, the county is maintaining a stable financial position due to budget cuts, some revenue increases and injections of cash thanks to federal coronavirus relief packages. Horry County enters the current budget season with slight surpluses and several challenges to overcome.
County leaders, both administrators and members of County Council, began the task of debating the July 2021 to June 2022 budget on Friday, the first budget where leaders will have to account for the funding losses from the pandemic. In June last year, county leaders chose to continue the 2019-2020 budget with few changes as the county weathered the pandemic.
In total, the county’s general fund entered this current fiscal year with a small surplus of $674,000 thanks in part to a bump in property tax, building permit and code enforcement revenue.
“That’s the growth finally being realized over the last several years into our revenues,” Spivey said of the fund increases.
The general fund houses most county operating expenses including that for police services, county employees and other functions of government.
Other funds also fared well, but thanks to budget cuts. Both the Beach Re-nourishment fund, which is used to maintain stretches of the shore, as well as the Recreation fund, which is used for programming in county parks and recreation facilities, sustained multi-million dollar cuts so that those funds could end the year in the black. Capital funds, like the county’s RIDE programs for roads and other pots of money for building and infrastructure improvements, also remain in solid financial positions, Spivey told council members.
An injection of federal CARES Act funding, the Myrtle Beach International Airport, and other county-managed airports, enter this budget cycle in a healthy position.
“The bright spot is that the impacts aren’t as severe as perhaps anticipated,” he said. “And the market, when it opened back, showed a lot of resiliency in that regard.”
The $22 million loss is due in large part to a slowdown of tourist traffic — and the cash they spend here — caused by the pandemic. The slowdown of the U.S. economy, prompting the Federal Reserve to cut national interest rates, also harmed county investment revenue to the tune of a $4.6 million loss.
“We are realizing shortfalls in those variable type revenues as you would expect, hospitality, accommodations, we have the casino boat revenue,” Spivey said. “We have the fees related to Parks and Recreation, where if we’re not having services we’re not getting fees.”
A local sales tax that helps fund capital projects also took a big hit, registering a loss of $6 million since March 2020 when pandemic-related shutdowns first rolled through the country.
Other losses reflect a lack of tourists visiting Horry County and spending money here. A 1.5% hospitality fee, a 1% hospitality fee, a 0.5% accommodations tax and accommodations tax money that flows from the state government, registered a combined loss of $5.92 million. Each of those funds are small taxes or fees placed on hotel rooms or other tourism-related purchases that customers pay to help fund roads, police and other services that facility the local tourism economy.
Revenues from the casino boats that set sail from North Myrtle Beach were also down close to a half-a-million dollars, registering a loss of $426,271 since March 2020.
Due to cuts to county recreation programs revenues fell by more than $688,000. Some revenues generated by the legal system, like fines and other court fees, were also down, in part because COVID-19 forced the county to close down its Government & Justice Center for several weeks.
Heading into the pandemic, Spivey said, the county coming out on the other side in one piece seemed unlikely at first.
“Honestly, it seemed like we were facing an almost impossible situation,” he told council members Friday morning.
But due to cuts, pauses on some expenses, and other budget maneuvers, Spivey said the county is in a relatively stable position as leaders begin hashing out next year’s budget.
“We are extremely fortunate as an organization,” he said.
