Grand Strand mayors blasted state lawmakers on Monday, accusing them of undermining their authority by introducing legislation that would maintain Horry County’s system for collecting hospitality taxes.
In a news conference outside Conway City Hall, leaders from area municipalities criticized county officials and the local legislative delegation. They said municipal officials have the right to establish a new hospitality fee structure because the system set up by a 1996 state law expired. The state bill filed this month seeks to maintain the status quo.
“It is a great leap backward for our state,” North Myrtle Beach Mayor Marilyn Hatley said of the proposed legislation. “House bill 4597 seeks to block our cities and towns from rightfully collecting legally imposed fees within our own jurisdictions. It also seeks to deny our right as duly elected officials to determine how to expend revenues collected in our jurisdictions for the good of our communities.”
Filed a day before the end of the legislative session, the bill calls for the county to continue collecting hospitality fees, essentially maintaining the decades-old system that was created to fund major road projects, including S.C. 22 and S.C. 31. Lawmakers have said they will continue to push the bill next year if the cities and the county can’t resolve their differences on hospitality fees before the legislature reconvenes in January.
The fee debate centers on the 1.5 percent levy collected on all prepared foods, hotel admissions and attraction tickets sold countywide.
Earlier this year, the cities of Myrtle Beach, North Myrtle Beach and Surfside Beach decided they wanted to dismantle the hospitality tax structure and establish new fees systems in their respective jurisdictions.
Myrtle Beach officials even sued the county, calling the county’s collection of hospitality fees inside the city “illegal.”
The disagreement led to a back and forth between the cities and the county over the fee. Myrtle Beach and North Myrtle Beach officials agreed to negotiate a deal with the county, but only if those conversations took place behind closed doors and all parties agreed to keep the discussions confidential. County officials panned that idea, slamming city leaders for their lack of transparency.
County officials then proposed a specific plan for dividing the tax revenues, but Myrtle Beach and North Myrtle Beach rejected the offer.
The objection from the municipalities has hampered the county’s plans for some key road projects, including I-73, a proposed interstate that would connect the Grand Strand with I-95.
In December, county officials signed a contract with the S.C. Department of Transportation (DOT) for that road work. DOT officials submitted a work plan for I-73 in March. Before state officials can begin those projects, county council must approve their plan. The deadline for that approval is June 30.
The projects include road design and right-of-way acquisitions. The work would also cover a $410,000 study of S.C. 22, which flooded after Hurricane Florence. The study would look at the cost of raising the road above the flood conditions.
During Monday’s news conference, municipal officials from across Horry County stood in solidarity against the county and the legislative delegation. The group included representatives from Conway and Aynor.
They accused the county and the delegation of misrepresenting their hospitality tax decisions as opposition to I-73.
“It is very disheartening that our actions to put our citizens and our communities first have been taken out of context by so many,” Myrtle Beach Mayor Brenda Bethune said. “We have a fiduciary obligation to our residents and we have the lawful right to manage our funds, the citizens’ money, for the good of our own communities. We are putting our citizens first and we are doing so legally, responsibly and ethically.”
Conway Mayor Barbara Blain-Bellamy said the hospitality tax revenues collected in the cities should remain there.
“They are to be used at the will of the municipalities,” she said. “We must stand up for our municipalities.”
City officials also took issue with the county’s decision to enter into a contract with the DOT without discussing the idea with municipal leaders.
Although county council’s vote on the contract was taken in public and city officials never objected to the move until after the agreement was signed, municipal leaders contend the county needed their blessing before making that decision.
“That is hardly a good example of negotiating openly and in public,” Hatley said. “It is more an example of how to extort cities and towns under the cover of darkness. Was the county’s agreement with South Carolina DOT the best arrangement? Who knows? There was never any discussion with the cities and the towns.”
Despite the county's calls for resolving the dispute, Hatley said county officials are not sincerely looking to negotiate with the cities.
“Why else would they run to our representatives and have them to propose such a bill as bill 4597?” she said. “There is no interest in negotiation there. Horry County is only using it as a big club that county council can use to let people who live and work in our cities and towns know that they are not valued, that they are not part of Team Horry.”
In response to the news conference, state Rep. Russell Fry, R-Surfside Beach, released a statement on behalf local lawmakers, including Reps. William Bailey, Alan Clemmons, Heather Crawford, Kevin Hardee and Tim McGinnis.
“Resolution of this important issue starts with discussion,” the legislators said. “As leaders, it is important that we talk with each other and not at each other. Press conferences are important but less effective than meaningful dialogue.”
The lawmakers said municipal leaders would have been better off walking across the street to Gardner’s law office and speaking with him.
However, city officials wouldn’t have needed to go that far.
Gardner attended the news conference and stood on one side of a fountain while city officials assembled on the other. They were no more than 20 feet apart.
After city officials finished speaking, Gardner told reporters that he didn’t contact state lawmakers about crafting the bill.
“The first I heard about it, it was already a done deal,” he said. “The delegation did this on their own. Nobody from the county, that I’m aware of, asked them to do that. It sounds to me like the delegation did what they thought was right and I think it’s a good idea.”
The chairman added that he would prefer to see a public discussion about how hospitality tax dollars should be spent, but he suspects the fight between the cities and the county will be resolved behind closed doors when both parties and their lawyers discuss the city’s lawsuit in mediation.
“In the mediation, that would be between the lawyers and the litigants,” he said. “It looks like both people would get what they want if they would do that.”