Mayors Add Confusion to Hospitality Tax/I-73 Funding Debate

May 21, 2019 7:09 AMViews: 12760

By Paul Gable

After watching a video last evening of a news conference held in Conway yesterday by the mayors of the various incorporated municipalities in Horry County, under the auspices of the Horry County League of Cities, I was dumbfounded by the misinformation and political spin by those elected leaders to the public.

I do enjoy it when the mayors get together and issue statements under the League of Cities banner. The League of Cities is nothing more than a lunch club of the mayors and the chairman of Horry County Council if that official wishes to attend. It has neither official nor legal basis for doing anything, but it sounds good in the media.

The issue was hospitality tax collections in Horry County and who gets to keep the revenue beginning next fiscal year. The latest catalyst for this public discussion is a proposed bill dropped by the Horry County legislative delegation on the next to last day of this year’s legislative session.

Simply put, the bill, if it eventually passes, extends collections of a 1.5% hospitality tax countywide with the revenue going to Horry County Government. The cities and the county also collect an additional 1% hospitality tax within their respective jurisdictions for a total hospitality tax of 2.5% throughout the county. The tax has been on the books by county ordinance since late December 1996 with the proceeds of the countywide 1.5% portion being used to fund major road projects in the county under the collective banner of Ride I projects (SC 22, SC 31, US 501 improvements for example).

The initial duration of the tax was supposed to be 20 years with several additions through the years which extended payment on Ride I bonds through January 2019. Each of the municipalities in the county passed resolutions supporting the 1996 county ordinance.

In April/May 2017, Horry County Council, under the leadership of then chairman Mark Lazarus and administrator Chris Eldridge, unilaterally acted, with the rest of council going along, to remove the sunset provision of the hospitality tax ordinance that was to end the collection of the countywide 1.5% tax when Ride I bonds were paid off.

The idea of Lazarus and Eldridge was to use the approximately over $40 million annual revenue from the 1.5% portion to fund building of I-73 in Horry County.

In July 2018, Horry County Council held a special meeting to discuss funding of I-73 and other projects with the 1.5% revenue when it became available.

In November 2018, Horry County Council, again led by Lazarus and Eldridge, passed a resolution to approve a contract with SCDOT for the I-73 project with Horry County providing up to $25 million per year from the 1.5% collections.

Beginning in February 2019, Myrtle Beach City Council approved an ordinance to capture the entire revenue from hospitality tax collections allowed under current state law within the city limits for its own uses. The other municipalities in the county quickly followed. In March 2019, Myrtle Beach filed a lawsuit against Horry County claiming, among other things, that the countywide 1.5% tax was illegal since January 2017. That lawsuit is ongoing.

In May 2019, the legislative delegation unilaterally chose to file the above mentioned bill in an attempt to save 1.5% countywide collections for Horry County with a view to preserving funding for the I-73 project.

Now to yesterday’s press conference.

North Myrtle Beach Mayor Marilyn Hatley led the charge, with Myrtle Beach Mayor Brenda Bethune in strong support, to attempt to place all the blame for the current controversy with county council.

Among other misinformation put forth by Hatley were none of the county’s actions to remove the hospitality tax sunset provision and sign the contract with SCDOT “happened under Mark (Lazarus).” They ALL happened before Lazarus left office on December 31, 2018.

Hatley and Bethune were two of the strongest supporters for Lazarus’ reelection. They only began raising complaints about the county’s actions after new council chairman Johnny Gardner took office in January 2019. Why wait so long to complain if, as they claim, the county has been acting illegally with hospitality tax collections since January 2017?

The answer to the above question lies much more with political calculations and the failed reelection bid of Lazarus than anything said yesterday.

Hatley said county council lobbied the delegation to introduce the state legislation for the 1.5% hospitality tax. Not true, no such discussion was ever held between county and delegation elected officials.

The respective mayors voiced support for the I-73 project, they just don’t want to fund it from hospitality tax collections within their respective jurisdictions. They want that money for their own uses.

That’s fine, but admit it, don’t spin it. And have the courage to admit that the recent actions by the cities, if ultimately successful, spell doom for the I-73 project.

Hatley said it was illegal for the county to collect any hospitality tax within city limits without the consent of the city.

Not true – current state law, Sec. 6-1-720, states, “The governing body of a county may not impose a local hospitality tax in excess of one percent within the boundaries of a municipality without the consent, by resolution, of the appropriate municipal governing body.”

Obviously the governing body of the county can impose a local hospitality tax of one percent or less within the boundaries of a municipality without the need for city consent. The bill proposed by the legislative delegation is an attempt to preserve the other 0.5% portion currently collected by the county.

Much more will be heard about this issue before any resolution occurs. I only ask that the cities’ elected officials be accurate with the facts when they speak publicly about it.

And don’t get ‘all high and mighty’ with public statements after your preferred candidate for county chairman, whose actions led to this current controversy, loses an election.

 

 

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