The North Myrtle Beach City Council on Thursday passed first reading of two ordinances re-allocating hospitality fee and accommodation tax funds, bringing more money into the city budget. But it could spell trouble for I-73.
“In the past, the [hospitality] and A-tax fee that was collected has been split between the city and the county,” said North Myrtle Beach spokesman Pat Dowling. “State law allows the local jurisdiction to collect up to 2 percent from the hospitality side and 3 percent from the A-tax side, so city council decided to bring all that money back to the city.”
Previously, the county and city had split the taxes. Each got 1 percent of the hospitality fee, and each got 1.5 percent of the A-tax money. Under the new ordinance, the city will collect the entire 2 percent hospitality fee and 3 percent A-tax money.
“The actual fact of the matter is the local jurisdiction has the right to charge the maximum in both categories,” Dowling said.
The ordinances would give the city up $6 million in new revenue, Dowling said. That money can be used for tourism-related purposes, including infrastructure and public safety.
“The taxes are designed to help tourist, visitors, to help pay for the infrastructure and services they use within a reasonable amount,” Dowling said.
The city of North Myrtle Beach is following in the footsteps of Myrtle Beach. This week, Myrtle Beach passed first reading of a similar ordinance, taking over the rights to use all 3 percent of the A-tax money.
“Myrtle Beach’s study of the law and its implications and their decision to move forward with it sparked the interest of our city council,” Dowling said.
But those decisions are putting I-73 in danger, said Horry County Councilman Harold Worley.
“They have the legislative authority do to what they need to do,” Worley said. “But what they are doing is the death knell to I-73. If that’s what they want to do they can do it. In essence it’s killing I-73 stone dead.”
That’s because the county was planning to budget $25 million of hospitality fee money to build the road, which would connect I-95 to the Grand Strand. But since the municipalities are moving to take over the hospitality fee money collected within their borders, that reduces the money the county could collect.
And because the money can’t be spent outside the boundaries of the government that collects the money, the cities of Myrtle Beach and North Myrtle Beach can’t use the money for the proposed road.
“I don’t think that they really care about I-73,” Worley said. “It’s just one of those situations. We as a council thought that Myrtle Beach, North Myrtle Beach and Surfside city councils were on board with I-73, but obviously we were very, very, mistaken. It’s obvious they are not in favor of I-73.”
North Myrtle Beach City Councilwoman Nikki Fontana said that the North Myrtle council hasn’t talked about the impact to I-73.
“It’s something we haven’t discussed yet,” Fontana said. “I’m sure that we’re going to still support [I-73]. I can’t speak for all of council, but we haven’t had a meeting or discussion about that. We were trying to take the steps last night to grab our money and keep it in the city.”
Fontana also said the city's ordinance is in line with Myrtle Beach's proposal.
“We kind of followed suit with them doing that,” she said. “We didn’t want to miss the opportunity to keep the money in North Myrtle Beach, so that’s what we did.”
The ordinance will still have to pass second reading before it becomes law.