Horry County Council is within one ordinance reading of establishing a permanent slush fund for pet projects using 60% of Hospitality Fee collections countywide as the revenue source.
A 2.5% hospitality fee tax is collected on prepared foods and drinks, admissions and lodging throughout the county.
Forty percent of the revenue (1% of the total 2.5% tax) is returned to the original jurisdiction (incorporated areas or the county for unincorporated area collections) in which the tax is collected. The remaining 60 percent of the revenue (1.5% of the total 2.5% tax) goes to Horry County specifically to pay off bonds issued for Ride I road projects.
Some of those bonds will be paid off in 2017 with the remaining bonds projected to be paid off in 2019. When the Hospitality Fee legislation was passed over 20 years ago, county council established a sunset provision for the 1.5% portion pledged for bonds.
In other words, 60 percent of the Hospitality Fee was supposed to go away when those Ride I bonds were paid off.
But, once a tax is created, government hates to see it destroyed.
Therefore, county council is moving rapidly to remove the sunset clause and allow the full 2.5% tax to be collected ad infinitum. According to county administrator Chris Eldridge, this tax currently collects approximately $38 million in revenue to the county annually.
To put that amount into perspective, $38 million is approximately 25 percent of the county’s general fund budget for Fiscal Year 2018, which begins July 1, 2017.
The revenue from this tax would not go directly into the general fund. According to state law, it must be spent on tourism related projects.