Proper Expenditure of Hospitality Tax Revenue

July 12, 2017 10:22 AMViews: 10014

By Paul Gable

A suggestion for the use of hospitality tax revenue was made at Tuesday night’s Horry County Council meeting that makes too much sense to ignore.

In a discussion of New Business, council member Paul Prince spoke about the poor conditions of many roads in the county as well as some need for advance planning in adding additional lanes to Hwy 90, Hwy 905 and roads extending off of those two.

Prince suggested meeting with the Horry County legislative delegation and governor Henry McMaster to find some funds to help with these roads.

Council member Harold Worley suggested spending the “two and one-half percent” on the roads. Worley’s reference was to the county’s hospitality tax.

Governments supposedly collect taxes in order to provide public goods and services. Think here roads, bridges, police, fire and mass education.

Hospitality tax is a little different in that state law requires hospitality tax revenue to be spent on tourism related expenses.

When hospitality tax was first approved by county voters in a county wide referendum, one percent of the total was designated to the government jurisdiction in which it is collected while one and one-half percent was designated to pay off bonds for Ride I projects.

The Ride I bonds are expected to be paid off on or before 2019. The one and one-half percent designated to those bonds brings in revenue of approximately $38 million per year to Horry County.

While it may take a little tweaking of state law to spend all of that revenue on the county road system, it is hard to argue that tourists do not use virtually all of the roads in that system. In addition the tax revenue could be spent on necessities such as public safety.

It is also hard to argue that local residents do not pay a significant portion of that tax revenue as the tax is collected on restaurant and bar tabs, prepared foods, fountain drinks in grocery and convenience stores and admissions to theaters and other recreation venues.

Worley’s proposal to use hospitality tax revenue when the Ride I bonds are paid off would provide a designated revenue stream for necessary government services.

The only real roadblock to Worley’s suggestion is that a small, but influential group of local movers and shakers want to designate the entire amount to paying the state match for I-73 funding.

There is no reason to build a new road that will not bring in 22,000 jobs as this small, local group would have you believe and will not bring more tourists to the Grand Strand. The only thing it may do is cut maybe 15 minutes off the trip to Dillon and I-95.

Why would we want to build a new access road to the Grand Strand when so many of our existing roads and bridges need serious maintenance?

The answer lies in who owns the land in and around the proposed I-73 route.

None of us like to pay taxes, but those that we do pay should benefit us first.

I-73 will certainly not benefit the mass of local residents, as well as tourists, as Worley’s proposal would.

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