Horry County pushes $572 million post-COVID budget forward. Here’s what taxes are going up.
Horry County leaders are a step closer to approving a $572 million budget for the next fiscal year that is likely to include several tax and fee increases for residents as leaders work to respond to growth.
After haggling over the budget last month and coming up with no clear agreements on tax increases or how to spend newly-available money from the hospitality fee, councilors on Tuesday took several votes on next year’s spending plan and — occasionally by narrow margins — advanced the budget to a third and final vote on June 15. The Council is tasked with passing such a spending plan by June 30 each year so that the county is funded for the next fiscal year from July to June.
Council members will have to vote one final time on the budget — meaning details of the spending plan could change — in two weeks.
On Tuesday, County Council members voted to approve the following tax increases:
A 3 mill increase in property taxes to pay for garbage hauling and other waste management needs. That increase is expected to raise an additional $18.2 million and would mean an additional $24 charge on a home valued at $200,000. That tax increase — which was already baked into the overall budget — passed 8-4 with Council members Tyler Servant, Bill Howard, Harold Worley and Al Allen voting against it.
A $45 increase in the stormwater fee to pay for an expansion of flood mitigation and stormwater services. That increase would bring the total stormwater fee from $44.40 to $89.40 and would raise $10.5 million next year, and $8 million annually in following years. County leaders want to spend that extra money on 36 new positions in the stormwater department and buy new equipment to help mitigate flood hazards around the county. That money would also pay for more mosquito spraying, flood mitigation studies, oversight of minor subdivisions and more. That increase passed 8-4 with Council members Tyler Servant, Harold Worley, Johnny Gardner and Al Allen voting against it.
A 3.4 mill increase in property taxes to pay for increased public safety services. That increase is expected to raise an additional $7.3 million and would mean an extra $27.20 charge on a home valued at $200,000. County leaders plan to spend that additional money on 78 new public safety positions including 21 emergency responders, 18 fire fighters, 15 police officers and 10 operators for the 911 service. That increase passed 7-5 with Council members Tyler Servant, Dennis DiSabato, Harold Worley, Johnny Gardner and Al Allen voting against it.
A 1.2 mill increase in property taxes to help staff the new fire station in the Longs area. That increase is expected to raise an additional $2 million and would allow the county to hire 12 firefighters and seven emergency responders to work out of that new station, which is currently under construction. On a $200,000 home, that increase means residents would pay an additional $9.20. That increase passed 8-4 with Council members Tyler Servant, Dennis DiSabato, Harold Worley and Johnny Gardner voting against it.
In total, the tax increases add up to a 7.6 total millage increase. Residents living in homes valued at $200,000, for example, would end up paying $105.80 more in taxes and fees next year.
As a whole, the county’s budget this year is significant as it marks the county’s attempt to regain its footing after the COVID-19 pandemic and respond to the influx of new residents moving to the county each month. As the coronavirus squeezed government budgets last year, Horry County punted on substantial budget negotiations last year, opting instead to pass a spending plan nearly identical to the prior year’s, with a number of cuts and spending freezes in place. Throughout the pandemic, the county froze new hiring, paused many large-scale projects and worked to cut costs without laying off employees. Complicating matters was the county’s lawsuit with Myrtle Beach over its hospitality fee which tied up millions of dollars potentially available to pad the budget.
But with the lawsuit and pandemic winding down through the spring, the county found itself in a better-than-expected financial position, able to direct the hospitality fee money to new positions and projects and able to take steps to increase services for the thousands of new residents who have moved here in the last two years.
Though he voted against some of the tax increases, Gardner, the council chairman, said he recognized the need to increase revenue for expanded stormwater and public safety services.
“With the growth we’ve had it would have been really nice to raise taxes a mill or two each year so it doesn’t sting as bad,” he said. “I’m not for raising taxes unless you absolutely have to, but at some point you absolutely have to because now, on top of the neglect, you have this exponential growth.”
More tax increases necessary?
Other council members said they would have liked to see the county go even further and raise taxes higher. The burden on residents, Council member Gary Loftus argued, amounted to only a few extra dollars per month to help hire more police, mitigate flooding and provide other services.
“The problem we have is, we have a county the size of the state of Rhode Island, give or take, that has fewer policemen than the city of Myrtle Beach. It doesn’t work,” Loftus said. “You’ve got to have the warm bodies out there doing their job and it’s going to be hard finding them because it’s hard finding police at any rate right now. I’m comfortable (with the tax increases).”
Indeed, Barry Spivey, an assistant administrator with the county who helps write and manage the budget, told council Tuesday that in order to keep up with the pace of growth, the county may have to raise taxes again next year. Between 90 and 100 new county employees are needed each year to keep pace with the demand for services, he said. Over the last 10 years, the county has added about 23 new employees each year.
“That’s the level of growth we have, which equates almost a two to three mill tax increase annually. Nobody wants to hear that, I understand,” Spivey said. “We will monitor the growth as it is occurring and try to use every opportunity to use that growth for addressing those new positions but over the last few years we have not had that luxury.”
Gardner said he recognized the tension between some residents wanting more from the county government, and others wanting low taxes.
“The guys like me, who grew up here, we don’t want a big government...there are people in Horry County who will take care of their issues themselves,” Gardner said. “There’s a balancing there, and you’re not going to please everybody because some people will tell you, ‘Raise my taxes, keep me safe, I’m good.’ And then some people will say, ‘No, I can’t afford it like it is.’”
Spending the hospitality fee money
Included in Tuesday’s budget discussion and votes was a spending plan for the county’s hospitality fee, money that was previously unavailable because of the county’s lawsuit with Myrtle Beach. With the lawsuit over, the county now has access to $23 million that was previously collected but never spent due to the lawsuit. That funding is one-time money and the county wants to put it towards a number of smaller capital projects including equipment for firefighters. The money will also go towards a firing range for police, as well as stormwater and recreation projects in coming years.
In addition, the county also has access to the recurring hospitality fee money, estimated to be $15 million annually in coming years. As planned now, one-third of that money will go to pay for 65 new county employees including 30 fire fighters and 15 police officers. Another one-third of that money will go towards road projects. And the final one-third will be used as part of a $147.5 million bond to pay for several large capital projects.
With that final one-third, the county will issue a bond — a form of debt — totaling $147.5 million and use the recurring hospitality fee money to pay off the debt over the next 30 years. County leaders have proposed spending that lump sum on the following projects:
The Augusta Plantation interchange
Improvements to the Atlantic Avenue and Waccamaw Drive intersection
Improvements to the waterfront in Little River
Phase one of the Rural Civic Center and Equestrian Center
A new recreation center
Improvements to the James Frazier Community Center
Recreation programs in the Socastee area
And intersection improvements around the county
Council members voted unanimously to approve that spending plan Tuesday.
A new pay scale for county employees
Also included in the county’s budget is a new scale for raises for employees. Rather than issue flat 2% or 3% raises for every employee, the county will now use a graduated scale based on how much a person makes. Under the new scale, employees earning $30,000 or less will receive a 5% raise; employees earning between $30,000 and $40,000 will receive a 4.17% raise; employees earning between $40,000 and $80,000 will receive a 2.5% raise and employees earning $80,000 or more will receive a 1.67% raise.
Under that scale, the county will also raise base salaries by half of what the annual raise for that position is. For example, if county position pays $35,000 a year and is eligible for the 5% raise, or $1,750, the base pay for that job will increase by $875.
Impact fees coming soon
Though discussed and debated for years now, County Council members hope to include impact fees — a one-time charge on new homes, apartment buildings, hotels and businesses — in this year’s budget. Tuesday’s vote didn’t include impact fees but council members are set to debate the matter — possibly for one of the last times — on June 10, and include the measure in next year’s budget. According to a study completed in 2019, Horry County could potentially charge developers up to $4,565 per new home, retail stores $7,439 per 1,000 square feet and hotels $2,587 per room. Those amounts would be maximum fees, and county council members will have to set the true amount when it debates the matter next week.
Still, some council members, including Gardner, are hopeful the charge on new building will pass this month. The county hasn’t been able to keep up with the infrastructure and service demands of newcomers, and impact fees will help make up the difference, some have said.
“We had an increase in revenue and stuff over time but that increase in revenue didn’t cover the increase in growth that we’ve had,” said Council member Johnny Vaught explaining the county’s budget issues. “So that’s been quandary, where do we put the dollars where they’re most effective?”
He said that impact fees will help in county budgets in coming years if the measure is passed.
“It turns out that increased property taxes from growth never totally pays for itself and that’s why we’re considering impact fees so that we can help that growth pay for itself,” Vaught said. “It’s a catch as catch can kind of thing.”
