By Paul Gable
A 2013 contract between WestJet Airlines and Horry County Government is still costing the county three years later.
Boiling the deal down to its essence, Horry County Council agreed to guarantee WestJet a 15 percent profit on a new airline route established for the 2013 summer tourist season. The county placed a maximum payout of $1 million on its guarantee.
At the time the deal was struck, we heard pronouncements from members of county council such as it was ‘almost guaranteed that this deal would not cost the county one cent.’
Instead the county owed WestJet $500,873 at the end of 2013 in order to live up to its contractual obligations.
A meeting of the Horry County Administration Committee, held on October 11, 2013, agreed to a payment plan whereby the Myrtle Beach Area Chamber of Commerce would pay WestJet the total amount due and the county would repay the Chamber out of its 5 percent set aside funds from county accommodations tax.
At that time, a balance of approximately $250,000 was in the county’s set aside account. The remainder would be repaid to the Chamber from county set aside accommodations tax funds in the coming years.
The Administration Committee approved a resolution at its meeting Tuesday to allow for continuing repayment of those funds.
The deal with WestJet raises several points about the functions of county government.
This was a bad deal from the beginning. County government has no business guaranteeing a private business a profit that includes the use of any county tax funds, property or otherwise.
Because this guarantee came from accommodations tax funds and not property tax funds, county council does not consider it as coming from county taxpayer dollars. Nevertheless, county council does have a fiduciary responsibility to spend it wisely.
According to state law, 30 percent of accommodations tax revenues must be spent on tourism marketing and promotion. The Chamber is the agency designated by county council to fulfill this function.
These funds are in addition to the approximately $25 million annually the Chamber receives from the City of Myrtle Beach tourist promotion tax, all of which are used to replace the tourism marketing costs that should be an expense of private business.
The WestJet deal is just another example of the corporate welfare mentality that pervades the minds (?) of our state legislative delegation and local elected officials while allowing the Chamber to be the elephant in the room of local politics.