Where are the funds from the Myrtle Beach Penny Sales Tax going?

MYRTLE BEACH, SC (WMBF) - The Tourism Development Fee, commonly referred to as the "penny tax" in Myrtle Beach, was implemented in 2009. So far, about $66 million has been collected on the one percent tax.

One penny of every dollar spent on retail, prepared food or accommodations goes into a fund. The state mandated 80 percent of that money goes to out-of-market advertising. About 20 percent goes towards Myrtle Beach homeowner's property tax rollbacks, and a very small piece of the pie goes towards capital improvement projects. The latter is projects residents and tourists can actually see in the city.

"These are things that we could go and do - as tourists come in, they would look and say 'wow,'" Myrtle Beach Mayor John Rhodes said.

Mayor Rhodes recently made it public that he wants to expand the boardwalk. Rhodes said he'd like to expand the current boardwalk, that is a little more than one mile long, to 4.6 miles. He said the city needs private funding before the boardwalk could ever be expanded.

The City of Myrtle Beach is heading into its fourth year of collecting the TDF. More than $57 million has been allocated towards advertising, and $1.9 million has gone towards tangible improvements in the city.

"I'd like to see maybe the 80 percent reduced down to 70 percent, which would give us another 10 percent that we could actually invest in more of the capital improvements," Mayor Rhodes said. "That's something that we're still knocking on doors, looking for money to do, as explained with the Boardwalk."

Mayor Rhodes said the extension of the boardwalk would cost roughly $20 million, and there's not enough money in the TDF funds for that. He's going after private funding, he said, because other investments can be made with the TDF funds that will bring in a greater return.

"It's not something that we can see as an extra benefit as far as economic impact as sports tourism would be," Mayor Rhodes said. "We know that the boardwalk would be a nice attraction, but I don't think it's gonna be the income-producing attraction that the sports tourism will."

Over the past three years, the city has made improvements using the $1.9 million. Some of the capital improvement projects the TDF has funded or will fund are:

  • Third Avenue South Gateway project, from Kings Highway to Ocean Boulevard (underway)
  • Convention Center HVAC replacement project (will begin soon)
  • New oceanfront park at 15th Avenue North (complete)
  • Replacement of dune crossovers (city completes about five per year)
  • Installation of mid-block crosswalks on Ocean Boulevard (some work underway)
  • Milling and repaving of Ocean Boulevard from 31st Avenue North to 52nd Avenue North (complete)
  • Grand Park Athletic Complex multipurpose fields and field house (underway)
  • Replacement and renewal at the baseball stadium (TicketReturn.Com Field)
  • Installation of field turf at Ashley Booth Field (underway)
  • Engineering and design of underground utility conversions on Ocean Boulevard, Second to Eighth Avenues North

Roughly 20 percent of the special tax goes towards trimming nearly 6,000 homeowner's property tax by 88 percent.

"There's the reduction in the homeowner's tax for locals- you can't ask for more than that," Myrtle Beach Homeowner Shirley Landry said.

Myrtle Beach Business Owner Jimmy Waldorf has owned the Fun Plaza Arcade on Ocean Boulevard for decades. Waldorf said the penny tax is the reason he had record-breaking numbers each year since 2009.

"I've seen a lot more people, a lot more customers come into town. A lot more people hanging out on the boardwalk- more than ever before," Waldorf said.

Even so, Waldorf said he'd like to see a little more money spent on concrete improvements, like public bathrooms along the boardwalk.

"I think the amount of money the city takes in on the one percent tax is high enough where they can probably use less money for advertising, a couple million dollars maybe, and apply that money toward projects in the city that help make the city better: the roads, sidewalks, you know, anything that would help make the city better so that when the people get here they would enjoy it better," Waldorf said.

Mayor Rhodes said he is working with at least one company that is interested in providing funding to extend the boardwalk.

Myrtle Beach Area Chamber of Commerce President Brad Dean said there are three main focuses for the long term future of the TDF.

The Chamber is putting a focus on bringing in people from the Midwest and Western United States. Dean said Myrtle Beach is already seeing some of that from the flights recently added to the Myrtle Beach International Airport's schedule.

Dean said the Chamber is in a good position to start capitalizing on the international markets too.

The final focus is to boost the shoulder season in Myrtle Beach, a time when people aren't typically traveling to the beach.

The TDF will expire in 2019.

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