Horry County’s legislative delegation stepped into the ongoing dispute between the county and the city of Myrtle Beach this week, filing a bill that calls for the county to continue collecting hospitality fees.
County officials hope to use those fees to build the Horry portion of I-73 and improve public safety services.
The state bill was introduced Thursday. Friday is the last day of the regular legislative session, but lawmakers said they would continue to push the bill next year if the two sides can’t resolve their differences before the legislature reconvenes in January.
“It’s time for the games to stop,” state Rep. Russell Fry, R-Surfside Beach, said in a news release. “Refusing to meet with Horry County and suing them doesn’t really inspire a collaborative spirit. Myrtle Beach sat by for years and never raised any objection. Now they seek to change the rules. I applaud Horry County Council for showing tremendous leadership in trying to work through these differences, and it is my hope that Myrtle Beach will finally agree to meet with them. From Congress to the state legislature to local governments, leaders along the Grand Strand have always worked well together and worked through differences. Cooperation has helped us all be effective and is a tremendous asset for our area. It’s time we renew it.”
At issue is the 1.5 percent fee that is collected on all prepared foods, hotel admissions and attraction tickets sold countywide.
The fee was originally created more than 20 years ago to help pay for major infrastructure projects, including S.C. 31 and S.C. 22. When the debt on those projects was paid off, county officials planned to use the hospitality revenues to cover the county’s portion of I-73, a proposed interstate that would connect with I-95 in the Pee Dee.
County officials also planned to spend a portion of those revenues on public safety services such as the police and fire departments.
But earlier this year the cities of Myrtle Beach, North Myrtle Beach and Surfside Beach decided they wanted to dismantle the hospitality tax structure that has been in place for more than two decades.
Myrtle Beach officials even sued the county, calling the county’s collection of hospitality fees inside the city “illegal.”
The dispute has 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 refused and blasted 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.
When asked about the state bill, city spokesman Mark Kruea provided this response:
“We typically do not comment on pending litigation, and this certainly qualifies. This matter – the legality of the hospitality fee more than 20 years later – is before the courts now, and we await a decision. … Very briefly, the cities’ 20-year agreements allowing the hospitality fee to be collected in their jurisdictions have expired; the original period for the fee itself has expired; the original purpose of the fee has been accomplished; the cities’ property owners already pay property taxes for county services; and the City of Myrtle Beach is on record as supporting I-73, with possible funding identified.”
For the county, timing is important. County officials in December signed a contract with the state Department of Transportation (DOT) for work on I-73.
In March, DOT officials submitted a work plan for I-73. Before state crews 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.
So far, the DOT has presented just over $12.4 million worth of projects to the county. If approved, they would be completed over the next year.
County council chairman Johnny Gardner could not immediately be reached for comment.