Wednesday, Oct. 28, 2009

Myrtle Beach tax break up for debate

The South Carolina legislature will consider a request from Myrtle Beach to give resident property owners a tax break a year earlier than state law requires, because on Tuesday, Rep. Alan Clemmons, R-Myrtle Beach, introduced a bill to change the new tourism tax law.

Mayor John Rhodes at Tuesday's City Council meeting announced the introduction and showed the signatures of support from the entire Horry County legislative delegation on a resolution the council passed recently to ask the state's General Assembly for the change.

"When we say we're going to do something, we do it," Mayor John Rhodes said at the council meeting.

Clemmons said the legislature is not in general session, but was in special session Tuesday to fix a hole in the state's unemployment benefits law. He was able to introduce the bill Tuesday rather than waiting until the general session starts in January because he had unanimous support from the rest of the House of Representatives. If any of the 124 House members had objected, it would have killed the introduction until the new year.

"We will come back in January, and this bill will be at the top of the heap of bills for consideration," Clemmons said. "We'll be hoping for passage in the House and the Senate so that it can become law."

Clemmons praised the relationship between Rhodes, the delegation and the legislature with moving the issue forward so quickly.

"We're all linking arms together and coming up with a win," he said.

Under the law passed this spring that allows the city to implement a 1 percent sales tax to raise funds for marketing itself to potential out-of-area visitors, the city is required to use a portion of the tax revenue to give resident property owners tax relief.

The law doesn't say how much relief taxpayers must get, and the City Council unanimously agreed it would credit property owners for all but about 7 mills in taxes that covers the city's debt service.

But the state law says the tax relief is to begin two years after the tourism development tax is implemented, and it went into effect in August. City council members agreed that with the recession, property owners needed help before then, and agreed to ask the General Assembly to change the law to allow the tax credit after one year instead.

The first time the Legislature can take up the bill is when the session starts again in January.

The city Tuesday also heard a presentation from Myrtle Beach Area Chamber of Commerce President and CEO Brad Dean, detailing how the chamber is spending money it borrowed in anticipation of the new sales tax revenue.

Because the state collects the tax money quarterly then issues a check, the chamber has not yet received any of the revenue from the tax on prepared foods, retail items and lodging that went into effect Aug. 1. The tax is estimated to generate between $14 million and $18 million a year, and the lion's share of the money will go to the chamber for out-of-area marketing.

So far this fiscal year, he said, the chamber has received about $17,000 from the city, but the chamber decided to report on how it has spent the money it borrowed on its own credit line so that the public could see exactly what's going on, because a portion of the debate over the tax involved public accountability.

The chamber borrowed about $4.5 million and has spent it on Internet, television, print and other advertising campaigns outside the Myrtle Beach area to draw the attention of potential visitors. The report also includes a long list of vendors and how much the chamber has paid each.

But more important, he said, are the results the chamber can show.

Phone calls between June and September to the chamber seeking information about visits here rose 871 percent over the same period last year, and half of the people calling said they had never visited the area before. Twenty-one percent said they hadn't been here in more than three years.

Unique chamber Web site visits increased by 1.5 million in the same period, Dean said, and they were all referred to area accommodations. Of those Web site visitors, 45 percent said they planned to visit the Grand Strand soon and had already made reservations. Thirty-two percent said they plan to visit but had not yet made reservations, and 20 percent said they are considering the Grand Strand in their vacation options.

"That means 97 percent of the people reached through the Internet either have booked, say they will visit or are considering it," Dean said. "I can't say they will all come, but the potential value of all those referrals is $3 billion. That's the potential we have to tap into. The hotels have to make the reservations, of course, because the chamber doesn't book hotel rooms, but that's huge potential."

Myrtle Beach International Airport, he said, saw an increase in air traffic in September alone of almost 10 percent, while air travel across the nation remained down from last year at the same time.

And area occupancy numbers were up sharply - 23 percent - in September, over last year, he said.

Dean said the chamber has posted all the information and charts, and has included information about revenue and expenses from last year, too, on its Web site.

Mayor John Rhodes asked Dean how the chamber chooses the areas it will advertise in, and Dean said part of the choice has to do with which ones have flights to Myrtle Beach. Part of the campaign has focused on areas that are within a day or two by car, as well, like Atlanta, which is only five hours away. He said the chamber is trying to bring people who have never visited before and researches areas to find which will give the best return on advertising investments.

The chamber will have an open house on Nov. 18, from 5 to 7 p.m., and will show some of the ads it has developed to draw visitors. The event is free and open to everyone.