For North Myrtle Beach, a TDF is putting tourism cart before the horse

By Myrtle Beach Sun News Editorial Board

The Horseshoe in North Myrtle Beach is a popular venue for concerts, but residents and visitors know they’ll have a walk to Ocean Boulevard and Main Street from wherever they manage to park their vehicles. For any of the many events on Main Street, from the upcoming St. Patrick’s Day Parade to a variety of festivals, parking is problematic.

More public parking is one of the infrastructure needs in North Myrtle Beach and the issue is relative to the March 6 vote of residents on an additional 1 percent sales tax, known as a tourism development fee or TDF. It’s a penny added to the retail cost of everything other than unprepared food.

Most revenue from the TDF finances out-of-area marketing designed to increase tourism. South Carolina law requires that TDF revenue go to a nonprofit organization such as a chamber of commerce. The city of Myrtle Beach has had a TDF for several years and the Myrtle Beach Area Chamber of Commerce receives more than $21 million annually for tourism marketing.

North Myrtle Beach Mayor Marilyn Hatley neatly explained the TDF at a neighborhood meeting. “It’s not a tax where the entire amount goes back to the city and benefits everyone in the community [with] all kinds of infrastructure and that kind of thing. One hundred percent of it during the first year goes directly to whatever organization we chose for it to go to.” That would be the North Myrtle Beach Chamber of Commerce, which has pressed the city to establish the TDF.

After the first year, 80 percent of TDF revenue must go to out-of-state marketing. At least 4 percent of the total revenue must be used for real estate tax rebates, making it attractive to homeowners. The remainder of revenue, after rebates, goes to city coffers. The North Myrtle Beach plan for TDF revenue, should voters approve it, is 4 percent for tax rebates and 16 percent to the city, which would use the new revenue for infrastructure, including parking.

“The decision you have to make is based on your own quality of life and what you do,” City Manager Mike Mahaney told Tidewater residents at the neighborhood meeting. “Spending another $8.5 million to bring additional tourists here — how does it affect your quality of life?” A better sales tax mechanism for improving infrastructure would be an additional penny specifically for capital improvements. “We would use that to solve our infrastructure problems.”

The capital sales tax is opposed by the S.C. Chamber of Commerce and some counties. That’s not surprising, given the general feeling about taxes already being high. Sales taxes are regressive, and while they put some of the burden on visitors, full-time residents also pay more for almost everything. In an election year, it’s unlikely state legislators and the governor will authorize new taxes.

Beyond the city’s infrastructure and revenue needs, North Myrtle Beach residents surely will question the wisdom of attracting more tourists when the infrastructure doesn’t fully support the current stream of tourists and growing population. Law enforcement agencies throughout the area already struggle at times with the impact of large numbers of people.

Mayor Hatley made another good point about the importance of voting on March 6. If folks don’t make the time to vote, or don’t feel it’s important, “… then you sure can’t fuss over that when it’s all over with.”

By the numbers

City of Myrtle Beach tourism marketing tax numbers for fiscal year 2016:

$27,247,624 | Total revenue

$21,798,099 | Tourism promotion

$5,449,525 | Amount to city (20 percent of total revenue)

$4,468,610 | Property tax relief

$980,000 | Tourism facilities (18 percent of revenue to city)

City of North Myrtle Beach projected tourism marketing numbers, after first year

$8,500,000 | Total revenue

$6,800,000 | Tourism promotion

$1,700,000 | Amount to city

$1,360,000 | Public parking facilities acquisition (80 percent of city revenue)

$340,000 | Property tax relief