County Council Votes Hospitality Tax Funds for Public Safety and I-73

By Paul Gable

Last Tuesday’s special meeting of Horry County Council provided some interesting insights into ongoing deliberations about the future use of hospitality tax revenue.

Technically called a hospitality fee by Horry County Government, the two and one-half percent tax is collected on all tourist accommodations, prepared foods and attraction tickets sold throughout the county. The revenue is split with one cent per dollar going to the jurisdiction (municipality or unincorporated county) in which it is collected.

The remaining one and one-half cent per dollar goes to the county to pay off Ride I bonds. Those bonds are expected to be paid off in the first half of calendar year 2019.

A sunset provision was placed on the one and one-half cent per dollar tax, when legislation implementing the tax in Horry County was passed, providing that portion of the tax would end when the bonds were paid off.

County council voted in Spring 2017 to remove the sunset provision and extend the tax indefinitely. The one and one-half cent per dollar tax is expected to generate $41 million revenue in calendar year 2019.

When the sunset provision was removed by a three reading ordinance of county council last spring, council chairman Mark Lazarus stated he would like to use the revenue to fund construction of Interstate 73. The projected revenue would have allowed the county to bond approximately $500 million for a 20-year period to help fund the I-73 project. It is expected completion of the I-73 portion from I-95 near Dillon to U.S. 17 in Myrtle Beach will cost approximately $1.2 billion.

This spring, Johnny Gardner challenged Lazarus for the Republican nomination for council chairman on the November 2018 general election ballot. During the primary campaign, Gardner focused on the public safety and infrastructure needs of the county, proposing using a portion of hospitality tax revenue to help meet those needs. Gardner won the nomination in June 2018 primary voting.

Council debated a resolution Tuesday night that initially proposed dedicating $30 million of the future one and one-half cent revenue to fund I-73 bonds. It was estimated this amount would generate approximately $400 million toward construction of I-73 (one-third of the estimated cost.) Approximately $7.8 million of the remaining revenue was proposed for public safety needs.

The debate was interesting for several reasons. Lazarus and council administrator Chris Eldridge tried to control the discussion emphasizing how important I-73 was to the county and how difficult it is to get funding from the federal and state governments for the project. Eldridge stated it was an opportunity for the county to “step up” and demonstrate the importance of I-73 to the county. He stated a split of one-third each between local, state and federal governments was a reasonable funding formula for the project.

State representatives Alan Clemmons and Heather Ammons Crawford (she of calling first responders “thugs” fame and Lazarus’ campaign manager), District 7 SCDOT commissioner Tony Cox and John Napier, lobbyist for the county in Washington, D.C. were in attendance to lend their support for the Lazarus/Eldridge plan.

Napier stated a federal appropriations bill that included funding for I-73 was not likely to be passed this year. Cox stated passing the county resolution would, hopefully, help get some state funding for the project.

Since the hospitality tax was passed by county council to fund Ride I, county voters have approved one-cent local option sales to fund road projects in Ride II and the current Ride III initiatives. The total amount spent on road projects from the three Ride initiatives exceeds $1.5 billion, most of which has come from the pockets of taxpayers in the county.

Our three U.S. Congressmen during that time, Mark Sanford, Henry Brown and Tom Rice, have contributed little in federal funds toward I-73. Our state legislative delegation, including Clemmons and Ammons Crawford, has been just as dismal in its attempts to obtain state funding for I-73.

But, all of them have felt no compunction in asking county council to provide a major funding portion of I-73. Remember, the current SC 22, already funded by Ride I taxes, is part of the I-73 route and will only require minimal upgrades to meet interstate highway standards.

Council member Harold Worley led a long debate on the resolution before he succeeded in amending it to provide $23 million for I-73 and $18 million for public safety funding. The $23 million included in the resolution will still raise over $300 million for I-73 if that remains the amount bonded against next year.

Worley received strong support from council members Johnny Vaught, Al Allen and Danny Hardee, with all instructing county staff to find ways to use the money for county needs.

County staff has been obstructionist on the use of hospitality revenues for public safety and other county needs. Initially its stance has been virtually none of the funds can be used for these purposes. By Tuesday, it had ‘found’ $7.8 million could be dedicated to those purposes.

Now it is tasked with finding ways to spend $18 million on public safety.

It is way past time for county staff and some council members to stop telling county voters what can’t be done with hospitality tax revenue and start discovering what can be done with it.

More debate on the use of hospitality tax revenues will occur in the coming months. The spring primary campaign and Tuesday’s council debates were good steps in the right direction toward providing for the needs of county residents rather than the special interests who continue to push for I-73.


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