Hilton Head A-Tax: How Others Do It

05 Nov Hilton Head A-Tax: How Others Do It

Over the past several weeks the City and our TDAC (ATAX committee) have be discussing the appropriate and legal use of taxes collected from accommodations often referred to as the bed tax. The City has in past years used all the funds for marketing to tourists outside of the 50-mile radius and paying the costs  for services to our guests out of the City’s general fund.In the 2015-16 budget, we signaled that some of the costs for making Beaufort a safer and better tourism destination would have to come out of the atax fund since the general fund was already stretched - a change in the way we have to do business.

Some have argued that this is not a legal use of the funds.  On the other hand, City Council has repeatedly cited other cities and counties that have historically used dollars from this fund to absorb tourism related costs.  See the story below as one example.  BK

Hilton Head seeks nearly $1.3 million in accommodations tax grants

The Town of Hilton Head Island is seeking nearly $1.3 million in accommodations tax funding this year to supplement the policing, beach services and general maintenance needed to support the island’s crush of tourists each summer.The town presented an application for the funds to its Accommodations Tax Advisory Committee on Thursday, and the panel will consider it alongside more than two dozen other applications at its meeting next week.The town’s application is more than one-third of the total amount requested from the panel, and its final $1.286 million price tag would be almost $250,000 more than it received last year and almost $300,000 more than it received two years ago, according to the application.But the application is not out of the ordinary nor unfair, committee chairman Mike Alsko said.”Historically we have always made a recommendation to fund the town in some regard or another,” he said. “They have a financial need because there is a significant financial burden placed on the town’s general fund because of tourism here. We’re seeing that as a valid reason to request funding.”More than 2.6 million people visited the island last year, which clearly impacts the way the Beaufort County Sheriff’s Office must staff there and the maintenance required across town, according to Alsko and the application.


For the past 20 years, the town has applied to use a portion of the accommodations taxes — money collected on overnight lodging from visitors — to help supplement the town services those same visitors use, said town manager Steve Riley.


This year is unlikely to be any different, although final recommendations on tax grants have yet to be decided, Alsko said.


The process on Hilton Head throws a similar government application in Beaufort into sharp relief.


Two weeks ago, the city’s Tourism Development Advisory Committee — its version of the Accommodations Tax Advisory Committee — disagreed with the city’s request for $250,000 in accommodations tax funding to pay for a surveillance system, extra patrol officers downtown and Spanish Moss Trail maintenance.


Instead, the panel recommended the city receive only $5,000 because its requests didn’t match the tax grants’ objective to help draw more visitors to the area nor that the panel favor parties raising matching private funds, committee leaders told The Beaufort Gazette.


Beaufort Mayor Billy Keyserling has written that the committee misunderstood the city’s request, noting that state law allows accommodations tax funding to be used to help provide services for tourists, such as law enforcement.


It’s a financing formula Hilton Head has employed for almost two decades that calculates that 29 percent of accommodations tax dollars be used to support police, code enforcement and maintenance, said Marcy Benson, senior grants administrator for the town.


Hilton Head’s accommodations tax committee has long agreed with that formula, but not without tackling the same questions Beaufort has recently considered, Alsko said.


“It’s a really interesting question, but I think their approach is very responsible,” he said of Hilton Head’s formula. “I think a lot of people have the question in the community, ‘Could the town support this on their own without the grant funding?’ But we know the ultimate ramifications of that would be higher taxes for the residents.”


Where would the money go?


If awarded, the town’s accommodations tax dollars would be split as follows, according to senior grants administrator Marcy Benson:


  • $954,782 to supplement the town’s more than $3.2 million budget with the Beaufort County Sheriff’s Office, including beach services.
  • $239,499 to supplement town maintenance on public facilities, parks, pathway maintenance and landscaping.
  • $91,777 to supplement the town’s code enforcement officers, who monitor town rules, such as migratory sea turtle protection laws.

Follow reporter Zach Murdock on Twitter at twitter.com/IPBG_Zach and on Facebook at facebook.com/IPBGZac