Goose Creek passes hospitality tax

  • Thursday, October 17, 2013

Anyone buying prepared food or beverages after Jan. 1 in Goose Creek will pay 2 percent more. That includes everything from gas station hot dogs to grocery store rotisserie chicken plus food and drinks sold in restaurants and bars.

On Oct. 8, after months of discussion, Goose Creek City Council voted to adopt a 2 percent hospitality tax that is expected to raise about $1 million a year for the city. Revenue collected from the tax must be spent on tourism-related cultural, recreational and historical facilities.

Proceeds collected from the local hospitality fee must be kept in a separate “Local Hospitality Fee Fund” segregated from the city’s general fund, according to the ordinance.

Goose Creek Assistant City Administrator Jeff Molinari said the tax will not have an impact on the city’s FY 2014 budget, which was also passed at the Oct. 8 meeting with a second and final reading.

Councilmember Jerry Tekac voted against the hospitality tax ordinance.

Goose Creek Mayor Michael Heitzler and the rest of council - Kimo Esarey, John McCants, Marguerite Brown, Mark Phillips and Franklin Moore - voted to pass it.

Goose Creek is one of the last municipalities in the area to pass a hospitality tax.

Those in favor of the tax said it will improve the quality of life and new recreation facilities will draw more people to the city.

Those against the tax said it will be detrimental for business.

Citizens were given ample opportunity to speak publicly about the tax at the Oct. 8 council meeting at city hall. Many who spoke echoed their statements from previous meetings when the fee was discussed.

“It’s totally misnamed - it’s an inhospitality tax,” resident Dennis Wenger said. “We’re going to charge 2 more percent to eat here? We might as well tell people to go home.

“To me it makes no sense. We’re debt-free right now . . . we’re going to raise taxes? It’s against business. It will mostly effect citizens. People don’t come here to eat at our Hardee’s.”

“Residents are the ones who are going to be hit by that tax,” Joel Arenson said.

Goose Creek Recreation Commission Chairman Jerry Glass said the commission has been around since the 1970s to maintain a quality of life and organize tennis, swimming, baseball, basketball and other local sporting events.

“We are way behind our projected master plan for facilities,” Glass said. “The hospitality tax would greatly benefit our ability to use money to generate additional facilities.”

“If I go to Hardee’s and spend $100 I’ll pay $2 more,” Patrick Hernandez said. “I think we can afford that.”

“Going to a restaurant is my choice,” Mary Reilly said. “Living in my home is not. I’m glad it’s not a property tax increase.”

“We’ve never heard anyone say let’s eat in Goose Creek because it’s cheaper here as opposed to Summerville,” Phillips said.

“I’ve weighed this over and over,” Esarey said. “It’s obvious we are leaving ourselves at a disadvantage.”

Moore cited data from a popular restaurant in the city that draws at least 49 percent of its business from other areas.

Moore asked City Administrator Dennis Harmon to read a professional opinion given by Aaron Arnett, a Greenville-based consultant the city hired to improve economic development.

Harmon said the most salient point in Arnett’s letter is that market demand and location are driving factors in bringing restaurants to an area.

Arnett’s letter states there are no studies in South Carolina that provide any data on a hospitality tax and its impact after it has been implemented, however his firm’s assessments are based on observations from other communities and discussions with other city managers.

The tax is unlikely to change consumer buying patterns, according to Arnett. All the major municipalities in Berkeley, Charleston, and Dorchester counties already collect a 2 percent hospitality tax.

“In a competitive market, these communities are collecting additional funding resources to support tourism and recreation projects, improving their quality of life and visitor amenities,” Arnett wrote. “These quality of life amenities in particular are often considered when a new resident or prospective employer is contemplating locating in a particular community.

“This puts Goose Creek in a bit of a competitive disadvantage, where nearby communities have resources that Goose Creek does not.

“According to data provided by the city administrator for Greenwood, well over $10 million was invested in public projects in their Emerald Triangle Cultural Arts District.

“Less than 35 percent of those monies came from hospitality taxes, with the rest coming from other private, state and federal funds. Without the hospitality tax, the city administrator states they would not have leveraged the other funds.”

In previous meetings and workshops councilmembers and city leaders discussed using the hospitality tax to built Phase 2 of the Community Center, which would house activities like gymnastics and essentially replace the aging Casey Community Center.

In a previous workshop councilmembers made a list of possible items the tax could be spent on.

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