Investing in our future
During the September 20th Chapin Town Council meeting, we had an initial discussion about the pros and cons of instituting a hospitality tax in Chapin. The goal would be to generate a new revenue source that would support specific projects in the town, like the addition of a proposed town park, adding to our sidewalk network in Chapin or even buying an additional police vehicle. As you recall in our recent community survey, citizens expressed a desire for more parks and open space, beautification of the town’s appearance, and enhancing the town’s transportation infrastructure with more sidewalks and bike paths. They were also supportive of augmenting support for the police and utilities departments.
As defined in state law, a hospitality tax, which may not exceed two cents on the dollar, is applied on the sale of prepared meals and beverages in establishments like grocery or convenience stores, restaurants, bars and marinas. It is a discretionary tax, in that people can choose not to dine out or go to another location to avoid the tax. But the reality is, most of the communities in the Midlands already have a hospitality tax implemented, with Columbia, Cayce, West Columbia, Newberry, Camden, Forest Acres, and Blythewood all having passed an H-tax in recent years. Irmo and Little Mountain haven’t adopted an H-tax, but by the time you drive to either of these towns, you have outspent the two percent you were trying to save by virtue of gas costing $2 a gallon.
An H-tax is the best option at this time for our citizens who live in the Chapin area as visitors would help pay for the infrastructure projects like a new park or sidewalks, which would be used by both in-town and out-of-town citizens after they are built.
In order to levy these local taxes, there has to be a positive majority of council willing to adopt an ordinance approving a local hospitality tax. The revenue generated is restricted for use on tourism-related programs or projects as defined in Section 6-1-730 of the South Carolina Code of Laws, which include tourism-related buildings, cultural, recreational or historic facilities, lands and water access, roads and bridges providing access to tourist destinations, marketing, and water and sewer infrastructure to serve tourism-related demand.
According to the Municipal Association of South Carolina, 115 cities/towns have H-tax ordinances on the books and generated $111,608,931 in 2014. H-tax revenues have been used to support improvements to walking trails, sidewalks, museums, golf and recreation facilities, streetscape projects in downtown centers, billboard advertising, amphitheaters, and event centers in communities throughout the state.
Based on conservative estimates extrapolated from existing food and beverage business licenses, Chapin could potentially generate $330,000 a year. If we consider this money as our local match for potential grants, we could generate capital improvement projects in excess of $1.5 million that would enhance our community, attract more visitors and also benefit our local citizens. An H-tax will have the greatest positive impact on the community and the lowest financial impact on in-town residents. An estimated 80 percent of the tax collected would be from folks from the greater 29036 and people who don’t live in Chapin but come here to eat, shop and work.
Given the council’s interests and community feedback, we could develop a priority list of projects to be funded each year with H-tax receipts. The additional source of revenue will free up general fund monies that can be used to support our administration, police, court, zoning and economic development efforts for the town. Potential projects that easily come to mind are extending our sidewalks on Lexington Avenue to Chapin Intermediate School, enhancing community appearance through beautification including landscaping, public art installations and trees, and developing the town park behind Town Hall to include the former train depot as a potential museum, picnic shelters, playground equipment, walking trails, amphitheater and water features. These are the types of projects identified in the most recent community survey. Not only do the people living in town benefit, but these projects also appeal to people working in Chapin and visitors that may stop through Chapin on their way to the Upstate or to the coast.
This is a discussion we must continue to have as council members and as a community. There is no magic pot of money at the state or federal levels we can depend on to help us address these community assets we want and need. In fact, the legislature did not fully fund the Local Government Fund again this year, and municipalities across the state were underfunded by $15.1 million. For Chapin, that was a $13,193 shortfall. The hospitality tax offers a real opportunity for us to reinvest in our town, and I welcome your comments and feedback on this matter.
Together We Stand – Chapin Proud
Mayor Skip Wilson