THE HOSPITALITY TAX

Hospitality tax battle lines: City vs. county?

dhinshaw@thestate.comJune 10, 2013 

  • Richland’s hospitality-tax dilemma

    Richland County expects $5.4 million in the coming year from a 2-percent tax on restaurant meals in unincorporated areas.

    Historically, the county has directed much of the money to the county’s largest tourist generators. This year, those groups – Columbia Museum of Art, Historic Columbia Foundation and EdVenture – received $1.4 million. They are eligible to receive an increase in appropriations of up to 3 percent a year.

    In addition, the council decides how to spend $1.5 million. This year, the money was divided among 20 venues and events with an attempt to spend 75 percent of the money in unincorporated areas.

    A citizen hospitality-tax committee recommends how to spend another $340,368 to promote Richland County. The council, however, retains final authority.

    Finally, another $1.5 million is being spent to pay off land purchased for two failed projects – a Northeast Richland regional sports complex and a state farmers market ultimately built in Lexington County.

  • More information

    Historically, the county has directed much of its hospitality-tax money to “The Big Three,” groups that generate the largest number of tourists — people who travel from at least 50 miles away. This year’s appropriations from the county for those agencies:

    Columbia Museum of Art

    $687,926

    12,011 tourists

    Historic Columbia Foundation

    $514,587*

    11,355 tourists

    EdVenture

    $235,834**

    138,963 tourists

    *Includes $250,000 for capital improvements **Includes $130,000 for capital improvements

New money and divisions along urban and rural lines have left Richland County Council in a quandary over use of its hospitality tax revenues, money devoted to bringing in tourists.

Wednesday, the council will try to come to amicable terms on what has become a heated issue, after chairman Kelvin Washington put together a six-vote majority devoting $44 million over the next 25 years to smaller projects in outlying council districts.

That approach could mean the Columbia-based agencies that get the largest county allocations would get hit with budget cuts next year. But community groups the Columbia Museum of Art, Historic Columbia Foundation and EdVenture have engaged in email and phone campaigns, hoping to sway the conversation.

“We’re trying to not only satisfy our local residents, but we’re trying to showcase this community and this county for people coming in,” said Catherine Horne, director of the EdVenture children’s museum.

“We all need to realize that Columbia can be a tourist attraction.”

But Councilman Norman Jackson points out that, after a decade of collecting the 2-percent tax on restaurant meals, there have been no tourist attractions built outside the city of Columbia.

He is part of a group that advocates spending money to ring the city with $44 million in attractions that have not yet been identified.

In Jackson’s southeast Columbia district, for example, he’d like to see a water park or golf course – or both – in the vicinity of Garners Ferry Road.

“Fair is fair,” he said.

“It’s 10 years now, and what has been done in unincorporated areas?”

But Councilman Paul Livingston, the council’s longest-serving member, said his biggest concern is making sure the county spends the money as it was intended – to attract tourists.

“When someone is in New York or Washington, you want people to say, ‘You’ve got to stop there,’” Livingston said.

He suspects council members are dreaming of projects that would provide for the day-to-day recreational needs of people who live in rural and suburban areas, a job that should be handled by the county recreation commission.

Councilman Jim Manning said the “huge pot of money” that came available last summer when the council pulled the plug on a Northeast Richland soccer complex created a sense of urgency to develop new projects.

At the same time, Manning had begun to question the fairness of a county law requiring that three agencies be funded automatically each year. Now, he advocates more conversation.

“We can have another year to figure this out,” he said.

When the county instituted the tax on restaurant meals in 2003, its strategy was to lay out money for the three largest tourist-generators and to build two new attractions in unincorporated areas – a farmers market and a sports tournament park.

But in recent years, the two new projects have failed. The farmers market ultimately went to Lexington County, and the regional sports complex lost its appeal once the council cut it from a multi-use, destination complex to a soccer tournament park. Now, the county has two large tracts, over 400 acres of land, that it’s paying off to the tune of $1.5 million a year. One tract is in Northeast Richland. The other is in southeast Columbia.

Starting two years ago, some on the 11-member council began pushing to revise the original mission.

Some say the push for change reflects a growing influence by suburban council members.

“What’s different now is there’s this line drawn saying it’s them against us, unincorporated against incorporated,” said Livingston, whose district is primarily inside Columbia.

Added Councilman Greg Pearce, also a city resident: “Whatever is decided by the majority, all of us are going to have to live with, unless you want to be like the State House where you’ve got people attacking each other all the time.”

Councilman Bill Malinowski was originally part of the six-vote majority to create six new attractions. His hope was to buy land for new soccer fields at Friarsgate Park.

But Malinowski said that, while he wants to see more money go to projects in unincorporated areas, he can no longer support the proposal because it needs work. Any major project using hospitality-tax revenues needs to go before the council with details allowing “a rational decision,” said Malinowski, adding council members have received hundreds of emails about the issue.

Given time, Councilman Damon Jeter said, he foresees the council focusing on the creation of two or three attractions in logical places. He could see an attraction near interstates in the northeast or southeast, at Lake Murray or along the riverfront in St. Andrews, he said.

“I would be leaning toward collectively saying we’re going to identify two projects, and commit to working with my colleagues to find two projects in two areas,” he said.

“I think we can get there. I just don’t want us to rush to judgment and do something that’s not wise.”

Jeter, Malinowski and Manning said Monday they expect the council to give the largest tourist agencies amounts that would match or exceed what they got this year.

“You have your city center and your hub where a lot of activities and attractions take place,” Malinowski said. “That’s what you have to focus on.”

Reach Hinshaw at (803) 771-8641.

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