Correction: An earlier version of this story incorrectly described the additional compensation public safety officials would receive. If county officials approve the proposed budget, uniformed personnel would receive a salary increase of $500 per year of continuous service up to 10 years ($5,000).
Horry County Council will raise taxes and business license fees to shore up the county’s budget and improve pay for public safety employees, according to the spending plan council supported Tuesday.
By a 10-2 vote, council members passed the second of three votes needed to approve their budget of more than half a billion dollars. A final vote must take place before the next fiscal year begins on July 1.
“The voters are not excited about tax increases,” said councilman Cam Crawford, who recently paid for a survey of residents in his Socastee-centered district to gauge interest on topics ranging from roads to tax hikes. “However, there seems to be what I would say is fairly strong support for public safety. If the increase is tied to public safety, from the data I got, it’s more acceptable.”
The initial budget council members voted for in April did not include any tax or fee hikes, but it called for using $1.3 million in reserves to make up for a shortfall in the waste management fund. That budget also required steep cuts to recreation services, including possibly closing the Carolina Forest Recreation Center. After multiple conversations with council members in recent weeks, county staff created a plan to address shortfalls in the recreation and waste management accounts, while providing higher-than-expected raises for county workers and additional compensation for public safety employees.
Those changes are included in the latest budget.
On Tuesday, council members expressed frustration with Myrtle Beach leaders for thwarting their plans for using hospitality fees to improve public safety services.
County leaders had hoped to spend up to $9.5 million of those revenues and avoid a tax increase. However, they said as long as the city of Myrtle Beach is challenging the county’s authority to collect the fees in court, they are being careful about spending that money.
“They took our tools out of the toolbox,” said councilman Danny Hardee. “We don’t have the money that we thought we were going to have. We could have passed this budget with no tax increase, but they took our tools out of the toolbox. So we’ve got to wait until we get our tools back to go to work on it. And I hope that this council maybe will sit here next year and roll this stuff back.”
Councilman Harold Worley agreed.
"Our system is not working," he said.
Worley and Tyler Servant did not vote in favor of the spending plan.
Here are some highlights from the latest budget:
Two tax increases
County council voted for two take hikes to fund public safety improvements. One increase (primarily for police) would impact all property owners while the other would strictly affect those in the unincorporated areas (for fire service).
For taxpayers hit with both increases, the hikes would amount to just over $15 more per year on an owner-occupied home worth $200,000. City residents would pay less, about $10 more per year for a $200,000 house. Those who live in the Murrells Inlet-Garden City Fire District would also pay the same rate as city dwellers because they don't receive fire service from the county.
Business owners to pay more
Like local municipalities, Horry County charges business license fees based on a company’s revenues.
The increases county leaders voted for Tuesday would generate about $4 million more per year, enough to keep county’s recreation and waste management accounts in the black.
Councilman Gary Loftus pointed out the county’s business license fees are much lower than those of other local governments, particularly the City of Myrtle Beach.
“We’re not talking little differences,” he said. “Every one of them is at least eight times more than ours. And granted, the businesses don’t like to hear that, but guys, the cities are living off you.”
Changing the merit pay system
Under former county administrator Chris Eldridge, county officials created a merit pay system that awarded raises to county workers from 1-5 percent based on annual evaluations from supervisors. However, the county typically budgets for a 3 percent increase in compensation, meaning in each department the average of the raises could not amount to more than 3 percent.
Giving an employee a raise of 4 percent or 5 percent then required limiting another worker’s raise to an amount below the three percent threshold.
County officials voted to scrap that system and provide an across-the-board raise of 4.4 percent this year.
They arrived at that number after a compensation study showed the county was on average 4.4 percent below the market midpoint for jobs countywide.
The county was just 2.2 percent below the midpoint for public safety positions and 7.1 percent below that mark for non-public safety jobs.
Despite the planned increase in pay, county staff cautioned council members that the public safety enhancements only address a single issue.
"They need more people," said Barry Spivey, the assistant county administrator over finance, adding that county officials should consider using hospitality fee revenues to hire additional police, firefighters and paramedics when that money becomes available. "That might be a great vehicle to help."
Police, firefighter pay improving
County leaders have struggled to deal with a compensation problem known as “compression.” It’s an issue that arises when salary increases for entry-level officers put rookie pay close to that of their veteran peers.
The reason this happened in Horry County is because officer salaries remained stagnant through the Great Recession as county leaders held the line on expenses to balance budgets.
Once economic conditions improved, county officials raised the starting pay for officers but didn’t address the years of flat wages for longtime employees.
“That has attributed to turnover, probably a higher frequency of turnover,” Crawford said. “Some of it has been caused by our merit system. I think that a merit system by itself does not adequately address wage compression. … We’ve got to look at some ways to tackle that problem.”
Some council members, including Crawford, have discussed creating a step system that would tie compensation to rank and longevity.
The latest budget plan doesn’t include such a system, but it does contain a 4.4 percent raise for all employees and an additional one-time perk for public safety personnel.
If it remains in the final budget, that public safety benefit would be a salary increase of $500 per year of continuous service up to $5,000 for uniformed personnel (police officers, firefighters, etc.).
For example, a police officer with 10 years of service would receive a $5,000 pay increase. An officer with two years on the job would get a $1,000 hike. That’s in addition to the 4.4 percent raise all employees would receive.
All the raises would increase the budget by about $4.3 million. Officials said the two property tax increases would pay for those enhancements.
Other fee increases
County officials have looked at multiple other fee hikes in recent weeks and many of those were in the budget they voted for Tuesday.
The latest changes include an increase in the per-passenger charge the county bills casino boats. The increase would take the charge from $7 to $10 and go into effect Feb. 3. The change would eventually add $250,000 more per year to county coffers (it would generate $100,000 in the next fiscal year because of when it takes effect).
Several hikes come from the code enforcement area of county government. Increasing the reinspection fee to $100 would bring in another $8,000 per year, creating a fire inspection fee would bring in $300,000, and a nickel increase in the per-square-foot cost of residential building permits would raise $400,000 annually.
County officials are also considering a municipal tax collection fee that would generate $200,000. Spivey said some other South Carolina counties already charge cities for handling their tax billing.
If those changes are approved in the final budget, county officials would use some of that money to hire two building inspectors, administrative assistants in the Register of Deeds and Clerk of Court offices, and support other programs.
Altogether, the fee hikes would net $704,000.
Despite all the talk of tax and fee increases, council members stressed the importance of being able to use hospitality fee income in future budgets.
"We could do things in Horry County that are not being done in any other county in the South," council chairman Johnny Gardner said. "We could have the best roads, the best fire [service] and the best police."