WMBF breaks down tax money in Myrtle Beach lawsuit against Horry County

Breaking down money in Myrtle Beach lawsuit against Horry County

MYRTLE BEACH, SC (WMBF) - The city of Myrtle Beach is suing Horry County for illegally collecting hospitality fee money, and now WMBF is breaking down the numbers involved in the lawsuit.

The hospitality fee was established after Horry County officials tried to enact a sales tax to address the areas road problems, but it was voted down.

Documents show the county realized the need for improved roads would only continue in the future, so from there it was able to establish and pass the 1.5 percent hospitality fee.

The 1.5 percent hospitality fee is generated by sales from food, drink, accommodations, and amusements.

A resolution passed by Horry County in 1996 collected money from the hospitality fee and put it toward projects like RIDE I. Myrtle Beach city leaders and other surrounding municipalities adopted resolutions supporting the fee, which expired in 2017

RIDE I built roads like SC 22, SC 31, and the Highway 544 widening.

RIDE I cost a total of $1.1 billion, but the Horry County area is responsible for paying back just $550 million of that. Money from the 1.5 percent hospitality fee helped pay back the loans taken out to build those roads.

According to Horry County’s most recent financial report, $90 million was still owed for RIDE I as of June 30, 2018. A county spokesperson said the county paid off the rest of their portion of RIDE I last month.

Myrtle Beach city leaders voted to take back control of that money back on March 7.

The lawsuit filed Wednesday by the City of Myrtle Beach says the county has been collecting hospitality fee money from Atlantic Beach, Aynor, Conway, Loris, Myrtle Beach, North Myrtle Beach and Surfside Beach since Jan. 1, 2017 improperly.

The lawsuit says county staff estimated 71 percent of the money generated by the hospitality fee comes from inside city and town limits in Horry County.

WMBF News dug into hospitality fee numbers from recent years. Based on 2018′s numbers, the county will only be left with about $11 to $12 million, where cities and towns will be left with about $27 million, if each area’s dollars stayed within their jurisdiction.

Officials with the city of Myrtle Beach say that in recent years they’ve generated about $17 million each year. With new changes implemented by the city after taking back control of that money, they expect to generate $15 million each year.

In Horry County’s 2018 Financial Report, it says Horry County Council passed a resolution committing about $25 millions dollars each year from the hospitality tax to I-73.

Although hospitality tax money is permitted to be used by road projects by state law, the lawsuit filed by the city of Myrtle Beach states I-73 is not part of the RIDE project.

The city of Myrtle Beach says they’re not sure exactly how they’ll spend the share of the money that they’ve taken back control of from the county.

If I-73 moves forward, the city says they’d like to dedicate 50 percent of the hospitality fee toward that project. If the project falls through, the city says they want an agreement outlining how the money is used moving forward.

Mayor Brenda Bethune says she’s reached out to chairman Johnny Gardner in an effort to sit down with him and discuss a tax and hospitality fee money. WMBF News reached out to Gardner but we haven’t heard back.

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