Debate continues over fairness of York County hospitality tax

adouglas@heraldonline.comMay 22, 2013 

Some members of the York County Council think there’s a better way to distribute the millions of dollars brought in by the county’s hospitality tax.

Councilman Bruce Henderson has urged others on the council for several weeks to revise the way the county divvies up its hospitality tax – a 2 percent levy collected by businesses selling prepared food and drinks in unincorporated areas such as Lake Wylie.

Henderson renewed his call for change on Monday, saying the county’s seven districts should keep for themselves a portion of the tax they collect instead of handing over all the proceeds to the county for distribution.

He also proposed establishing a Western Convention and Visitor’s Bureau to serve Clover, Lake Wylie, Fort Mill and Tega Cay’s tourism marketing needs.

York County and the city of Rock Hill pay operation costs for a Convention and Visitor’s Bureau in Rock Hill on Anderson Road which was established to promote tourism for the entire county.

The County Council’s finance and operations committee is studying Henderson’s proposals.

A majority of the council would need to approve a local law change to allow individual districts to keep a percentage of the hospitality tax money.

The committee is trying to find a way to be “a little more equitable” with the hospitality tax, said Councilman Michael Johnson, who represents Fort Mill and Tega Cay.

A proposal from the committee could include, Johnson said, continuing to pay for the Convention and Visitor’s Bureau’s operations, using some hospitality tax “at-large” for county projects and returning some of the money to the seven districts, depending on how much they contribute.

Council Chairman Britt Blackwell voiced caution over a new distribution plan, saying it might not be seen as more fair when “somebody gets a bunch and the next person hardly gets any.”

Henderson’s Lake Wylie/Clover-based District 2 has historically been treated unfair, Henderson says, when it comes to using the county’s hospitality tax money.

Last year, District 2 contributed about $352,000 – about 5 percent of the overall county balance – in hospitality tax money, Henderson said.

Residents in Lake Wylie pay the tax more often than visitors do and have little to show for it, he said.

Henderson and his predecessor, former councilman Tom Smith, have lobbied the council for years to allocate some of the county’s hospitality tax for a 50-acre park at Crowders Creek.

The largest collection from one district in hospitality tax – about 60 percent of the county’s $1.7 million total last year – came from Johnson’s District 1, Henderson has said.

State law provides for counties and cities to distribute hospitality tax as they wish as long as the money is spent on tourism-related facilities, said John DeLoache, an attorney with the South Carolina Association of Counties.

Across the state, 14 counties and 44 cities use a hospitality tax to boost tourism efforts.

Henderson’s proposal to send a percentage of the tax dollars back to individual districts may be the first of its kind in S.C., if the council approves changing York County’s law.

In Richland County, the hospitality tax is collected in unincorporated areas and pooled together, not divided among the county’s 11 council districts.

Last year, Richland County collected about $4.5 million in hospitality tax.

In Spartanburg County, hospitality tax money is not sent back to individual districts for discretionary spending. Last year, the county brought in $3.7 million through its hospitality tax.

Smaller counties, such as Jasper County, also collect a hospitality tax without dividing its uses automatically into separate districts. Jasper’s 2 percent food and beverage tax brought in about $255,000 last year.

Discretionary spending in districts could be a compromise to Henderson’s proposals for York County, but Lisa Meadows, director of the Convention and Visitor’s Bureau, said she isn’t sure what that would solve.

Some districts may only see small percentages of the money and find it difficult to pay for projects, she said.

Without enough cash on hand, the county might turn to borrowing money to start projects normally paid for with hospitality tax, Meadows said.

Henderson’s call for change stems not only from a historic lack of county support for the Lake Wylie area but also from the amount of money spent on running the Convention and Visitor’s Bureau in Rock Hill, he has said.

Between July 2006 and June 2012, the county allocated to the bureau about one-third of the more than $8 million in hospitality tax brought in.

The idea of creating a western York County visitor’s center would probably increase spending and duplicate services, Meadows said, which may not be the best use of the county’s money.

Meadows joined the York County bureau in October 2012 after serving as the executive director of a visitor’s bureau in Bristol, Tenn., and Bristol, Va.

In Bristol, she learned that dividing resources to compete for the same geographic area is not necessarily a good idea, she said.

Visitors don’t care, she said, whether York County is marketed by a western or eastern office just as they didn’t notice whether the city of Bristol was marketed by Tenn. or Virginia.

The Convention and Visitor’s Bureau markets attractions and activities across York County, Meadows said, and she wants what’s best for all districts.

Henderson’s Clover and Lake Wylie areas haven’t been ignored, she said.

Over the past three years, York County has designated $300,000 to help pay for the New Centre Park in Clover. About $92,000 was given to the Lake Wylie Chamber of Commerce to promote events and create maps.

At county meetings over the past few months, Meadows said, she’s heard mixed messages about financial support for the visitor’s center and its services.

In March, the Convention and Visitor’s Bureau asked the council to consider spending about half of its $3.3 million in hospitality tax reserves to pay for a new visitor’s center in Rock Hill’s Riverwalk. Blackwell suggested that a committee vet the idea before an “up or down” vote.

The council will hold a public hearing on its 2013-2014 budget proposalat 6 p.m. May 29 in the Council Chambers at 6 Congress St. in York.

Anna Douglas •  803-329-4068

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