HAPPENING TODAY: Myrtle Beach leaders discuss controversial tax

MYRTLE BEACH, SC (WBTW) – Myrtle Beach City Council passed the first reading of the ordinance that would renew the one-cent sales tax without a vote by city residents.

In May 2009, Myrtle Beach city leaders voted the controversial “tourism development fee” into effect. The one-cent sales tax was put into place for 10 years with no vote by the residents. The fee is set to expire in August 2019 and must be renewed in order to be collected for another decade.

While most tax increases must be approved by voters, the Local Option Tourism Development Fee Act, passed in 2009, also allows a super-majority of city council to increase the tax. Myrtle Beach city council chose the latter option in 2009.

According to the ordinance, the sales tax can be renewed through majority vote – which renews the tax through a vote by only city council members and the mayor – or through a referendum, allowing the tax to be voted on by Myrtle Beach community members.

Myrtle Beach Mayor Brenda Bethune told News 13 Monday she supports the city’s controversial “tourism development fee” and she doesn’t want a voter referendum on the tax.

The Local Option Tourism Development Fee Act requires 80 percent of the money generated by the one-percent sales tax to be used for out-of-market advertising. Myrtle Beach gives the money to the Myrtle Beach Area Chamber of Commerce. The rest of the tax money pays for residential property tax relief and tourism-related capital projects.

Mayor Bethune says when she was running for the city’s mayoral position, she heard from city residents who wanted to keep their property taxes low, so she doesn’t see the need for a vote.

“Going door-to-door and making voter phone calls, people didn’t say we want a referendum, we want to do away with the TDF,” Bethune said. “What I heard was, ‘Please keep our property taxes low.’”

Bethune says she was clear in her campaign that she supported the TDF and was still voted into the city’s top position.

“In my mind, that basically was a referendum,” Bethune said.

Despite the support, Bethune says she had from city residents, a growing online petition, with nearly 300 signatures, demands a referendum. “City Council’s decision is UNFair and UNAmerican,” the petition says. “Help send them a message: We DEMAND THE RIGHT TO VOTE!”

“The people need to vote on this,” Anthony Calda said. He is a home and business owner in Myrtle Beach. He said one of his big problems with the TDF is it gives wealthy people the biggest benefit.

“The middle class and lower class, they save money, yes, but not as much money,” Calda said. “And I see it defined as helping the people that really don’t actually need it.”

Because the rebate is based on a percentage of someone’s property taxes, the biggest benefits go to the wealthy. One person with a home worth nearly $9 million received a tax credit, paid by the sales tax, worth $22,315.83 in 2017, tax records show. According to the city, a person with a home valued at $199,000 would receive a tax credit of only $505.46.

Bethune says before the second reading of the ordinance, which would renew the tax upon majority vote, a public forum will be held where the Myrtle Beach Area Chamber of Commerce will explain how the money is used and how it benefits residents.

Mayor Bethune says the chamber of commerce’s fourth quarter accountability reports will be published on its website. She also said the city’s CFO Mike Shelton will be included in all annual audit reports moving forward with the board of the chamber of commerce.