Tag: tourism tax

Budgets - Cuts, Spending and You

Budget Time for Local Governments

This week will see several local governments, particularly Myrtle Beach and Horry County, in budget workshops as next year’s revenue and spending is considered.

If you have never seen the local budget process in action, you should consider at least watching some of the workshop meetings on local cable television or live streaming on the internet.

After all, it’s your money they are spending and services for you they are supposed to be providing.

Much of the discussion will be on the agencies’ respective general funds. Those are the funds that pay for public safety, public works, administration and so forth.

For each agency, approximately 65% of general fund expenditures are for personnel pay and benefits.

However, the respective general funds are not the only budget areas that affect local citizens.

The Horry County Solid Waste Authority, which is a component unit of Horry County Government, is asking for a $7 per ton increase on the cost of dumping municipal solid waste (household garbage) at the Highway 90 landfill.

If county council approves a rise in the SWA MSW tipping fee, every household and business in the county will be paying more for garbage disposal.

The City of Myrtle Beach parking fees, which go to the Downtown Redevelopment Corporation and are currently helping fund the taking of businesses through the use of eminent domain, are a problem for all county residents.

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RIDE III and Horry County Voters

Horry County voters will be asked to tax themselves for another seven years for what is known as RIDE III.

The referendum question will ask voters to approve an additional one-cent sales tax for seven years with the proceeds going to road projects.

When the Capital Projects Sales Tax legislation was initially approved by the SC General Assembly over 20 years ago, its goal was to provide a funding mechanism for the Conway Bypass Project, or what we now call S.C. 22.

A one-cent additional sales tax levied for seven years to pay for the county’s portion of the cost of construction of S.C. 22 wasn’t a bad idea. The projects now proposed are in the “nice to have”, instead of a justifiable “must have”, category.

But, a tax once levied is a difficult thing to do away with and creative ways were found to extend this taxing ability to other jurisdictions.

Since the initial RIDE I project constructed S.C. 22, politicians have found (manufactured?) justifications to ask voters to make this a recurring tax in Horry County.

The politicians found this was such an easy sale to the voters that RIDE II was added in 2006, a one-cent sales tax for school construction was added in 2008 and the one-cent sales tax for tourism advertising was added in Myrtle Beach in 2009.

Of course, the tourism tax was never subjected to a referendum by voters because that would probably have failed at the ballot box. Instead, our local legislative delegation and Myrtle Beach City Council conspired to have that tax approved by a super majority vote of city council.

In my opinion, we have reached the point where one-cent local option sales taxes are out of control in Horry County.

This is especially true in the case of the tourism tax where citizens are forced to pay increased taxes in order to reduce the marketing budgets of Myrtle Beach hoteliers and golf course owners.

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NMB Council Blinks on Tourism Tax

The North Myrtle Beach city council decided Friday that the voters would have a say on whether or not a tourism tax to benefit the NMB Chamber of Commerce will be imposed within the city limits.

The decision occurred during a public workshop on whether a local one-cent sales tax should be charged on sales within the city. At least 80% of the proceeds of the tax would go to the NMB Chamber to fund tourism marketing and advertising expenses that should be a responsibility of individual business owners.

The concept of a publicly elected body taxing citizens for the benefit of private businesses is abhorrent in any scenario, but, not allowing the voters a say in the process, as is practiced in Myrtle Beach, borders on dictatorial.

At least for now, the NMB Council nipped in the bud the question of whether to impose the tax by supermajority vote of council members, the way it was made law in Myrtle Beach.

NMB Mayor Marilyn Hatley alluded to a January or February 2017 time frame for a special election referendum question on whether to impose the tourism tax, but council would have to pass an ordinance on the tax before the referendum question.

The dynamics of a special election, with its traditional minimalist draw of voters, still allows the Chamber a better than average chance of winning the tax vote if a referendum is held.

But, it is better than in Myrtle Beach where the voters have no say at all.

The North Myrtle Beach Chamber of Commerce was established nearly 20 years ago with the specific goal of drawing additional tourists during the spring and fall shoulder seasons.

Funding for the NMB Chamber came from membership fees and the 30% of accommodations tax revenues collected in the city.

According to sources familiar with the Chamber, in recent years it has added employees and expenses, thereby eating up its funding.

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Greed is Good Fever Strikes North Myrtle Beach

It appears ‘greed is good’ fever has struck in North Myrtle Beach as the city considers implementing a one-cent tourism development fee (tax) to follow in the footsteps of Myrtle Beach.

If there is one governmental entity I wouldn’t think other governmental entities would want to copy, it is Myrtle Beach City Council. But, never mind.

The North Myrtle Beach Chamber of Commerce wants North Myrtle Beach city council to copy Myrtle Beach city council in implementing a tax on private citizens to pay for business marketing.

The Chamber evidently believes the money belongs to it rather than to the citizens. Consider the following quote by former Chamber board chairman Bill Griste in a letter to North Myrtle Beach City Council.

“We feel that leaving this significant and large amount of marketing revenue unused would not be a wise move for the City of North Myrtle Beach, nor would be good stewards of this resource.” Bill Griste

Think about that quote for a minute. The resource Griste is talking about is money in the pockets of citizens – A “significant and large amount,” according to him.

Being good stewards apparently means taxing the citizens to pay for the marketing costs of private business. In other words, the Chamber advocates corporate welfare as good stewardship of private dollars – A very interesting concept in a supposedly conservative area.

By that logic, allowing citizens to keep any of their hard earned money, instead of taking it all in taxes, means the government is not being good stewards of the resource (private dollars).

Sorry, I forgot, these aren’t “taxes” they are “fees”. It’s irrelevant that they are charged on the purchase price of items at the checkout counter.

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General Assembly Extends Tourism Tax

The SC General Assembly extended the tourism tax enabling legislation allowing for the extension of the tax on local residents and visitors through 2029.

Both the SC House and SC Senate overwhelmingly overrode the veto of Gov. Nikki Haley on House Bill 5011 making the extension of the tourism tax a virtual guarantee.

The very best part of the tax extension, for the business interests that want it, is that once again the tax can be imposed by a supermajority vote of Myrtle Beach City Council and the citizens will have no say in the process.

There is a provision in the bill that allows for a voter referendum on the question of extending the tax, instead of a vote by city council, but that’s merely window dressing. Myrtle Beach City Council doesn’t let those kinds of decisions go to the voters and it doesn’t say no to the Myrtle Beach Area Chamber of Commerce.

The Chamber will be guaranteed hundreds of millions more public tax dollars to use in “out-of-area” marketing. I wonder how much of that is being used in China?

The hotel and golf course owners who control the Chamber board get to keep marketing dollars in their pocket while transferring those expenses to the taxpayer.

And we can hear 10 more years of “Oh yeah, it’s working” ads.

You have to give credit where it is due. This extension was slickly handled and was really never in doubt. So far, there have not even been whispers of how many, if any, sequentially numbered cashier’s checks, from those “like minded” individuals, were needed this time around to get the job done.

We are told free market capitalism is a wonderful thing. Maybe we can even experience it in Myrtle Beach, Horry County and South Carolina someday.

Until then, all those “anti-tax Republicans” we supposedly send to Columbia can continue to forget their campaign promises while continuing to practice crony capitalism and corporate welfare with our tax dollars.

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No Renewal Yet on Tourism Tax

The decision on whether Myrtle Beach will be able to reimpose its tourism tax remains in question at this time.

The SC House adjourned debate on a bill (S1122) that would provide a means to reimpose the tourism tax if the bill passes.

Debate on the bill is now scheduled for Tuesday May 31, 2016.

The original bill passed the SC Senate unanimously, but the House amended the bill to eliminate a provision that would allow Myrtle Beach City Council to reimpose the tax by a supermajority vote of at least two-thirds of its members.

If the bill passes in its current, amended form, the tourism tax would have to pass a referendum of city voters in order to be reimposed.

Eighty percent of the revenue raised from the tax goes to the Myrtle Beach Area Chamber of Commerce for marketing the Myrtle Beach tourism attractions out of area.

Since being approved in 2009, the city has transferred in excess of $120 million to the Chamber. This has allowed the private tourism corporations to reduce their marketing budgets by as much as 95%.

Such a transfer of wealth from a public tax to benefit private businesses should be subject to approval by a voter referendum. Actually, it shouldn’t happen at all, especially in an area that prides itself on being so free market capitalist and conservative Republican.

It’s obvious the conservative politicians and their capitalist buddies don’t have a problem imposing taxes and spending the resulting revenue, just so long as it doesn’t come from their pockets.

The bill still has a couple of hurdles. It must pass two more readings in the House. If it passes there in its amended form, a compromise will have to be worked out with the Senate on whether or not to only allow reimposition of the tax after a favorable referendum of the voters.

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Myrtle Beach Tourism Tax Renewal Hits Bump

The effort to renew state legislation that allows the Myrtle Beach tourism tax hit a bump this week in the SC House Ways and Means Committee.

The bill, S1122, originally introduced in the SC Senate in February 2016 by local senators Greg Hembree, Ray Cleary and Luke Rankin breezed through the Senate without a single no vote.

The SC House reported the bill out of the Ways and Means Committee with an important amendment that could have an interesting overall impact on whether the current one-cent local sales tax for tourism promotion gets renewed.

The Ways and Means Committee struck the provision that the tourism tax could be renewed (reimposed) by “an ordinance adopted by a supermajority of the municipal council which must be at least two-thirds of the members of the municipal council.”

The only provision remaining in the bill for reimposition of the tax is the “approval of a majority of qualified electors voting in a referendum held pursuant to this section called by a majority of the members of the municipal council.”

Myrtle Beach City Council imposed the tax on the general public in 2009 with a supermajority vote of council. The tax was never put before the voters in a referendum, allegedly for fear it would not pass.

If the amended bill successfully passes vote of the full House, it will be interesting to see if the elimination of the supermajority option to renew the bill withstands conference committee.

When it was first passed through an ordinance approved by a supermajority vote of Myrtle Beach City Council in 2009, the local option tourism development fee became the first and only local option sales tax (that’s what it is) to be enacted in the history of the state without a referendum vote of approval.

The result of the tax is the Myrtle Beach Area Chamber of Commerce receives over $20 million public tax dollars each year to spend on out of area tourism advertising.

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MBIA

Is Myrtle Beach Tourism Tax Working?

Local television stations carry daily ads telling us the Myrtle Beach tourism tax is ‘working.’ The ads are run by the Myrtle Beach Area Chamber of Commerce and its associated entities in the hospitality and business community.

Beneficiary of approximately $18 million per year from revenue generated by the tax, the Chamber has good reason to advertise the tourism tax is working. Its marketing arm, the Myrtle Beach Area Convention and Visitors Bureau receives the proceeds from the tax to spend in ‘out-of-area’ advertising to promote tourism to the Grand Strand.

But, going beyond the advertising message (dare we call it propaganda?) one has to ask how is the tax working.

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