NMB Takes Proper Approach to Tourism Development Fee

By Paul Gable

North Myrtle Beach is to be commended on taking what many consider the proper approach to deciding whether to institute a tourism development fee (TDF) in the city.

City Council decided it was appropriate for the residents of North Myrtle Beach to decide whether a TDF is to be collected. Therefore, a referendum on whether to approve the TDF is scheduled for March 6, 2018 in a stand-alone vote.

The role of the city ends with the decision to hold a referendum. No government body, personnel or equipment may be involved in the campaign, according to state law. Individuals who are government personnel may only support or oppose the referendum question on their own time outside of government facilities and not as part of their official duties.

State Law Sec. 8-13-765 states in part, No person may use government personnel, equipment, materials, or an office building in an election campaign,” and “This section does not prohibit government personnel, where not otherwise prohibited, from participating in election campaigns on their own time and on nongovernment premises.”

If approved, the TDF is a one percent fee charged on all purchases in the city to which state sales tax applies. Items such as food, rent/mortgage and medicines are exempted.

If approved, 80% of the revenue collected from the fee will be given to a marketing organization, usually the local Chamber of Commerce, to promote tourism from out-of-area locations. The remaining 20% goes to the city for things such as owner-occupied property tax rebates, public safety, parking and other infrastructure or similar types of city expenses.

From statements made recently to media, it appears the city will use the state mandated minimum (4% of the total revenue) to apply to property tax rebates to owner-occupied properties. The remaining 16% of revenues will be used for other city initiatives.

This approach is the best because it shares the benefits of the fee to the largest number of citizens, rather than keeping it for just a small percentage of the population.

A significant portion of the revenue will come directly from tourists and the city’s portion of the revenue can offset some of the costs to the local economy from the tourism industry.

The portion that goes to advertising can be used to promote the clean, safe, family atmosphere North Myrtle Beach is known for. It will also help contribute to hospitality tax and accommodations tax revenues, which help offset the costs being a tourist destination brings to city goods and services.

A tourism development fee can help keep a destination location competitive, especially when specific types of tourists are the target market. In addition, the portion of the resulting revenues that go to the city allow for  expenditures which helps offset the problems that Act 388 of 2006 caused for local governments.

Since citizens will pay this fee on local expenditures, it is entirely appropriate that they should have the final say in whether the TDF becomes a part of the North Myrtle Beach business climate.

The citizens should take the time until March 6th gaining as much information as possible about the tourism development fee, how it will be used and how it can benefit them. This information should include how total transparency on the uses of the revenue.

This fee can help North Myrtle Beach remain competitive in the tourism market with Myrtle Beach and other municipalities that are seriously considering instituting the fee. In addition, the intelligent use of city revenue can keep North Myrtle Beach from having to play catch up in city goods and services as Myrtle Beach is now facing. Myrtle Beach used all its revenue for property tax rebates to the detriment of public safety and city infrastructure.




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