I expected more public comment on the proposed hospitality tax at our council meeting last week. Jerry Caldwell with the Coffee Shelf spoke as a business owner that would be directly impacted by the hospitality tax as he sells prepared food and drinks. He has questioned whether Chapin is truly a tourist destination and if it was fair to categorize Chapin residents in 29036 as tourists. He asked that I address this so I will be happy to oblige.
I know that people who live outside of town limits are not “tourists” to Chapin. They contribute greatly to our community’s well-being as consumers of goods and services of Chapin businesses. Conversely, they pay very little to support our road and sidewalk infrastructure, police force, municipal court and other town services.
While we’re not Orlando with millions of tourists coming to town, we do have tourists and what I would call day visitors that come to Chapin regularly. In fact, Dreher Island State Park draws on average 185,000 people a year and is probably our top tourist destination for the area. The Chamber of Commerce tracks visitors each year as the official Visitors’ Center for Chapin. According to their 2016 application for Accommodations Tax funding from Lexington County, they estimated 34,500 annual visitors to Chapin, of which they characterized 18,000 as tourists.
Lake Murray is a popular destination, and according to Miriam Atria with the Lake Murray Country Tourism Board, almost a half-million people visited Lake Murray in 2015-2016, with an economic impact of $18.5 million. The Chapin Labor Day Festival and Parade generates a massive influx into the Chapin community each year. Between the families who come out to watch the parade, the parade participants, street vendors and festival goers, we have more than 20,000 in town.
If you think about the number of retirees living in the area, think about the visits they enjoy with friends and family that come to Chapin. We don’t have a scientific way to track that, but I constantly see people out who introduce me to someone in their party that is visiting them from another location. Sometimes they may be from Columbia but more often it’s someone who resides in another state. And think about the vendors who come to Chapin to meet with some of our major employers like Ellett Brothers, GIS and the VC Summer Nuclear Plant.
To another of Jerry’s points about following other municipalities and wanting to be different, we do want to be different. We do want to maintain our quaint small-town village feel. Maybe this statistic is worthy to note – Chapin has the third lowest millage rate in Lexington County at 11.5 mills. The average Chapin property tax bill is $45 per $100,000 of assessed value. By comparison, our friends in Springdale pay 57 mills (population 2,800); Batesburg-Leesville pay 99 mills (5,400); Cayce pay 45 mills (12,500) and Lexington pay 35 mills (20,000). So we are very different from our sister communities in Lexington County. Speaking with other municipality personnel, investments in tourist defined and related activities have generated as much as 9% growth in their businesses revenue. This type of positive growth translates into a stronger financial position for the municipality and reduces the possibility of higher property taxes and other fees for residents and businesses in the future.
Another important point to consider is the General Assembly’s actions to not fully fund the Local Government Fund since 2009. In 2016, municipalities across the state were underfunded by $15.1 million. For Chapin, that was a $13,193 shortfall and collectively since 2009, that amount is about $75,000. That’s not as much money as the projections for what a hospitality tax could generate, but it is tax money that is being diverted to other uses instead of being returned to the communities for services mandated by our legislature.
The whole point to this discussion is not simply administering a new tax, but looking for ways to reinvest in our community to maintain a high quality of life for our citizens with the least amount of impact for our in-town residents. Our greater Chapin community spoke out this summer in favor of reducing traffic congestion, adding more sidewalks and bike paths as alternatives to driving, addressing the town’s appearance through beautification efforts, and adding amenities like public open space and parks.
Obviously we don’t want to intentionally hurt any of our local businesses as they play a vital role in our community and make up a significant portion of the town’s general fund. Once again, the main objective of the hospitality tax is to create an environment that enhances the quality of life for all, in addition to increased revenues and stability for businesses. I welcome this dialogue with our businesses and residents about funding options as we move forward.
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