The S.C. Supreme Court will review Horry County’s appeal in the county's legal fight with Grand Strand cities over hospitality fees, according to an order signed last week.
Chief Justice Donald Beatty on Thursday signed an order that said the high court will consider the case. County officials don’t expect the court to issue an opinion on the matter for at least a year. That’s long after the deadline county council members gave the cities to reach a deal on dividing hospitality fee revenues and paying for I-73.
“Still hope to reach [an] agreement,” Horry County Council Chairman Johnny Gardner said via text.
Myrtle Beach spokesman Mark Kruea could not be reached for comment, though the city typically doesn’t discuss pending litigation.
The legal fight between the cities and the county began earlier this year when Myrtle Beach leaders decided they no longer wanted the county collecting a 1.5 % hospitality fee inside city limits on restaurant meals, hotel stays and admission tickets. North Myrtle Beach and Surfside Beach leaders agreed with Myrtle Beach, which sued the county in March.
The cities maintain the hospitality tax agreement they supported in the 1990s expired in 2017 and the county never obtained their permission to extend it. They have also objected to county officials’ suggestion that some of the money be used for improving public safety services in the county.
Earlier this year, the cities approved new fee structures that did not require them to share similar revenues with the county.
County officials have argued that the traditional fee system brought in over $12 million more per year than the cities' new funding method. They also maintain that both the county and the cities should help pay for the proposed interstate.
County leaders signed a contract with the S.C. Department of Transportation (DOT) in late 2018 to pay for work on I-73. But on Aug. 28, county council voted cancel that contract in 90 days unless the county reaches an agreement with local municipalities to jointly fund the road.
County officials had planned to use hospitality fee revenues to pay for $12.4 million worth of projects in the first year of the DOT contract as well as tens of millions more in subsequent years.
The contract is also a critical part of a federal grant application the DOT submitted for I-73 funding. DOT Secretary Christy Hall has warned that the state could be forced to withdraw its request for the $348 million grant because of uncertainty about how much local tax money would be available for the I-73 project.
County leaders insist they don’t have enough money to pay the DOT for work on the proposed interstate without additional city funding.
City leaders have said they are willing to help pay for I-73, but both sides hit an impasse in August during mediation for the cities’ lawsuit.
So far, the cities have prevailed in court and the rulings have prohibited the county from collecting its fee inside municipal borders. The county still collects the fee in the unincorporated areas.
Despite legal setbacks, county officials have been moving forward with appeals while the settlement discussions continue. Those efforts led to the S.C. Supreme Court agreeing to review the case.