MYRTLE BEACH, SC (WMBF) - City leaders in Myrtle Beach said business license reform going on in Columbia could be detrimental to the city and end up costing taxpayers more money.
House bills H3650 and H3651 in the Labor, Commerce and Industry Committee of the General Assembly were a major topic of discussion at the city council's workshop Tuesday morning because leaders worry they could lose money from the changes those bills would require for charging for business licenses.
Right now, the city of Myrtle Beach charges a fee specifically for businesses that are located outside of the city limits, but do business within the city.
That includes landscaping, plumbing and electrician services, because they still use city services but don't pay all of the taxes businesses within the city do.
Myrtle Beach City Manager John Pedersen said a bill changes the city's ability to do that and also makes it so those businesses pay a fee based on 75 percent of the revenue they make in the city, while businesses in the city still have to pay taxes on 100 percent of their revenues.
He said that loss alone is projected at more than $2.5 million.
Other proposed changes to the system would cost the city even more money, such as the timeline for collecting the business licensing fees by scheduling collections for the end of the year instead of the beginning. This could cause a year-long gap for Myrtle Beach in collecting this revenue.
The city manager said there would be only three ways to make up for the losses the bill could cause.
"Reduce services to its residents or it could raise business licenses to those that are still in the city which is, as we discussed earlier, an inequity or we can raise property taxes to help cover it," Pedersen said. "So everyone in the city has a stake in this decision."
Pedersen added the bill proposes a $100 first business license fee, which would be the same for both small and large businesses. He added the city has supported business license reform in the past, but this set of bills has radical changes.
The city plans to let the General Assembly know its thoughts and how this could be harmful to city operations and taxpayers.
Brad Dean, president and CEO of the Myrtle Beach Area Chamber of Commerce, told council these proposed changes are a bad idea for South Carolina and it's a horrendous idea for Myrtle Beach and Horry County.
In other business on Tuesday, the assistant city manager presented information on the economic benefit of sports tourism.
Back in 2013, sports tourism had a direct spending impact of more than $127 million. Three years later, in 2016, that was up nearly 50 percent to more than $185 million.
Spending increased every year since 2013 as well, including a 12 percent jump from 2015 to 2016.
Sports tourism isn't currently self-sufficient for Myrtle Beach because what people are paying the city directly to play sports isn't fully making up for what the city is paying to provide the services.
However, Pedersen said the industry is getting closer to being self-sufficient because the city changed its fee structure last year.
"We probably make two or three times what it costs us to provide that service in terms of impact on things we don't get directly from that provider, like business license fees, hospitality fees, accommodations taxes and the tourism development fee," he said.
Finally, the city of Myrtle Beach is also looking to identify and improve vulnerable infrastructure for the next major storm.
Myrtle Beach was one of only five communities to be chosen to receive a technical assistance grant from the United States Environmental Protection Agency to increase resilience for future floods. Approximately 70 applications were submitted.
The grant covers the cost of a consultant to hold workshops, gather information and come up with strategic plans for the future to improve how the city's infrastructure handles flooding.
"This whole study was designed to help us recover from those as quickly as possible," Pedersen said. "One of the side benefits is we may be able to go through this process and identify some ways to improve our ratings to save our constituents more on their insurance."
A community workshop to share ideas and information about being more resilient from flooding will be on March 15 from 5:30 to 7:30 pm at the Myrtle Beach Train Depot. Residents, neighborhood leaders, developers and others are invited to attend.
A six-hour meeting is scheduled for the day after for city leaders and staff members to talk about what was discussed at the community meeting.