Editorial: Richland, Columbia should follow Cayce’s lead on hospitality tax

August 25, 2013 

Cayce officials had hoped to use a hospitality tax to pay for improvements to the popular Riverwalk but thought better of it, at least for now.

TIM DOMINICK — tdominick@thestate.com Buy Photo

— CAYCE OFFICIALS made the right decision Wednesday when they shelved their plans to impose a 2 percent tax on prepared foods in the name of attracting tourists to the city. Columbia and Richland County, which have used their own hospitality tax revenue in unbridled and legally questionable ways, would do well to follow Cayce’s lead and rescind their taxes.

Columbia and Richland County never should have enacted the levy, because it puts too much pressure on an already-elevated sales tax and tempts cities and counties to do precisely what they have done: use the funds for reasons other than allowed by law, which is to attract tourists, and, worse, make up reasons to use the money.

Why should any government in the Midlands enact a tourism tax? Too often, Columbia and Richland — like others around the state — spend the money on parks and other projects that are used by local residents, not tourists.

For this fiscal year, Columbia authorized $9.8 million in hospitality tax expenditures, with $3 million going into park security and other so-called tourism-related expenses that aren’t actually related to tourism. A little more than $2 million went to private groups for festivals and other events that purportedly draw tourists.

And the city, which still owes $13 million on bonds backed by hospitality taxes, is considering borrowing millions more to pay for so-called “legacy” projects that could include a $6.4 million to $10.3 million whitewater park along the Columbia Canal, an unspecified “recreation catalyst project” in North Columbia and an $850,000 children’s splash pad at Finlay Park featuring the “Busted Plug” sculpture by Columbia artist Blue Sky.

Recently, Richland’s council considered a plan to create a pork-barrel system that would allow council members to direct more of the $5.4 million collected annually to districts in unincorporated areas. Fortunately, the council didn’t act on that proposal, and a committee is working on a new plan.

Whatever it comes up with will be on top of projects the council already has manufactured just to give it something to spend money on. Case in point: It continues to pursue its bizarre plan to attract tourists to Lower Richland via a 44-acre park — a dubious proposition at best. The county paid $1 million for the property and recently approved another $1.4 million to fund the first phase of the project, meaning more money will be spent there.

The problem is that cities and counties need more funding sources. Lawmakers should focus on that rather than capping property taxes and making it more difficult to fund basic needs, as they did several years ago. They can begin by relaxing restrictions on hospitality taxes to allow local officials to use the money for general purposes.

Instead of trying to figure out ways to manipulate the law and use the money to pay for actual needs, Columbia and Richland County, and Cayce and every other local government that has or is considering the hospitality tax, ought to lobby the Legislature for that change.

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