May 24, 2013

Editorial: Hospitality taxes provoke wasteful, wishful spending by Columbia, Richland County

WHEN COLUMBIA and Richland County first adopted the 2 percent tax on prepared food, we warned that it could one day lead to unprecedented wasteful and wishful spending.

WHEN COLUMBIA and Richland County first adopted the 2 percent tax on prepared food, we warned that it could one day lead to unprecedented wasteful and wishful spending.

If the city and county hadn’t reached that point before, they’re certainly there now. Our key complaint about the tax is that its restricted use forces local governments to dream up ways to spend it.

State law requires the money be spent on projects that draw tourists, but officials often stretch that definition to meet their desires. In addition to using the money to fund arts groups and entities such as the Columbia Museum of Art and EdVenture Children’s Museum, city and county officials also have funded items from wish lists that have included parks and other projects normally paid for with general tax dollars.

Richland County has made some particularly bad missteps. For example, it sought to team up with the state to replace the State Farmers Market with an extravagant facility. The county made the state grandiose promises, with the hospitality tax being the major funding source. Richland officials even bought a $4.55 million piece of property for the new market and transferred most of it into state hands. Ultimately, the state jilted Richland and decided to move the market to Lexington County as part of a public-private partnership. State lawmakers would later allow the county to pay off the $4.55 million debt on the land using hospitality taxes and to partner with the S.C. Research Authority to develop a research park on the property.

Just recently, the county wisely ended its years-long — and wasteful — effort to build a $21 million soccer complex in Northeast Richland, but not before spending more than $7.3 million on land and pre-construction planning. The unnecessary complex would have been operated outside of the purview of the county Recreation Commission.

Officials should sell the Northeast Richland property and exercise due care in determining how the proceeds as well as the $4.5 million that had been set aside for the soccer complex will be used. They must not waste a dime of it on yet another pie-in-the-sky endeavor such as the plan to create a 44-acre park in Lower Richland. Frankly, that project should be abandoned as well; there is little chance of it becoming a serious tourist draw.

For its part, Columbia, which still owes $13 million on bonds backed by hospitality taxes, is considering borrowing another $4.3 million to $14.3 million to pay for so-called “legacy” projects. While City Council hasn’t decided on a list of projects, some possibilities include a $6.4 million to $10.3 million whitewater park along the Columbia Canal; an unspecified “recreation catalyst project” in North Columbia; a $750,000 children’s splash pad at Finlay Park featuring the “Busted Plug” sculpture by Columbia artist Blue Sky; and a baseball park (a big no-no) in the proposed Bull Street neighborhood.

Some City Council members feel this is a good time to borrow money because interest rates are so low. But that alone doesn’t justify spending money on these projects. The city doesn’t have to spend hospitality tax dollars just because they’re being collected.

Are these projects necessary? Are they legitimate tourist draws? We’re sure some would be nice to have, but they aren’t essential, which is a pivotal question at a time when many service needs are lacking due to a dearth of funding.

Instead of wasting this money on dreamed up projects, Columbia and Richland officials should get serious about convincing state legislators to allow local governments to use hospitality taxes for general purposes so that real needs can be met.

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