I-73 Funding, the County’s Hidden Objective in Hospitality Fee Squabble

By Paul Gable

Hidden beneath an ever rising pile of complaints, answers, motions, injunctions and exhibits in the City of Myrtle Beach v. Horry County lawsuit regarding the 1.5% countywide hospitality fee is the determination of a core group of county council members, county senior staff and special interests to retain sufficient funding for the construction of Interstate 73 in the county.

This has been the objective since April 2017 when former council chairman Mark Lazarus convinced council to remove the sunset provision from the county’s hospitality fee ordinance. Lazarus’ stated purpose at that time was to provide funding for I-73.

The month after Lazarus failed to retain the Republican nomination for council chairman, he conducted a special meeting of council to dedicate the revenue from the 1.5% countywide hospitality fee to the I-73 project.

At that meeting, council approved two resolutions, 82-18 and 84-18. Resolution 82-18 dedicated up to $25 million of the revenue from the countywide hospitality fee to the I-73 project. Lazarus tried for the entire amount of revenue, approximately $43 million, but was argued down by council member Harold Worley who was holding out for $18 million to be dedicated to public safety and infrastructure needs within the county.

However, under county ordinance, all the revenue from the 1.5% hospitality fee collected by the county is placed into a special road fund. Resolution 84-18 directed county staff to prepare an ordinance amendment to allow that revenue to be spent on roads, public safety and infrastructure.

The ordinance amendment dictated by Resolution 84-18 has never been prepared to this day. County staff, with the unspoken agreement of a majority of council, ignored the will of council expressed in Resolution 84-18 so the revenue from hospitality fees cannot be used for public safety and infrastructure other than roads.

During a budget workshop in late November 2018, Lazarus led council in approving entering into a contract with the South Carolina Department of Transportation, called the I-73 Financial Participation Agreement, for the county to commit up to $25 million per year for funding the project.

After Myrtle Beach sued in March 2019 to end the county’s ability to continue collecting the 1.5% countywide hospitality fee and after the District Court enjoined the county from continuing those collections, thereby removing the revenue stream the county intended to fund the agreement with SCDOT, council has still refused to revisit that agreement.

There have been subtle signs of the intent of special interests to keep I-73 funding alive since Myrtle Beach first filed its lawsuit.

County council members Johnny Vaught, Dennis DiSabato and Cam Crawford announced results of a purported poll of voters in their respective districts in which the council members claimed approximately 75% of their constituents supported the I-73 project.

The Myrtle Beach Area Chamber of Commerce followed with a statement about a purported “independent poll”, which claimed 74.6 percent of those citizens polled supported I-73.

I submit both of those supposed polls are nothing but B—S—!

Put the question of funding I-73 to an advisory referendum for county voters and you won’t get anywhere near a majority voting for the new road.

The voters of the county understand what many of their elected representatives apparently do not or do not care about. There are too many requirements for road improvements and flood mitigation on US 501, SC 9, SC 22, Hwy 90 and Hwy 905, for which any saved revenue from the hospitality fee should be spent, before funding a new highway from which only a handful of local businesses and individuals will profit.

So far, the county has had its clock cleaned in court. Actually, since Lazarus first began this quest over two years ago, it has been handled in a ham handed, but fatally flawed manner and there is nothing to suggest those council members who have picked up the banner will handle it any better.

Much of the county’s defense is that nothing in state law prohibits the county from establishing a countywide fee and effectively forcing collections within the city limits as it dictates. Of course, there is nothing in state law that specifically gives the county that power either.

A quick review of the history of the county’s Road Maintenance Fee, collected on every car registered in Horry County, may suffice to question the county’s argument.

After the county passed the Road Maintenance Fee, the cities sued the county over where the money collected within their jurisdictions would be spent. As a result, the cities and the county entered into a consent order by which the county returns to the cities 85% of all revenue from the road fee collected on vehicles registered within their respective taxing jurisdictions.

The Financial Participation Agreement was set to begin July 1, 2019. According to statements made to council by staff, SCDOT has agreed to hold off letting contracts for engineering services and rights of way purchases until October 1, 2019. Both of those types of contracts can be entered into by SCDOT without prior approval from the county but with the county solely responsible for paying for those contracts, according to the terms of the financial agreement.

Even if the amendment called for by Resolution 84-18 is never considered by council and no hospitality fee money is spent on public safety needs, wouldn’t it be better to spend any money that may accrue to the special road fund on existing roads?

Regardless of the final resolution of the hospitality fee lawsuit, I challenge council to put the question of funding I-73 or funding road improvements like those mentioned above to the people.

Or are the council members who have signed on to help the few get their payday too corrupt to care?


Comments are closed.