What's Another 2% Among Friends?

Sundae Horn

Hyde County manager Bill Rich proposes raising occupancy tax by 2%.

At the May 8th, Hyde County Board of Commissioners (BOC) meeting, (which was originally scheduled for May 1st, but postponed due technical difficulties), the commissioners heard a presentation from Bill about the benefits of raising the occupancy tax (OT). 

What's Another 2% Among Friends?

We love meetings on Ocracoke, so there will be another meeting on Monday, May 15th at 3pm at the Community Center. This meeting will be for the OT board, lodging business owners, Ocracoke Civic and Business Association board members, and even the general public to hear a presentation and put in their two cents about the proposed OT rate hike. 

Currently, Ocracoke has a 3% OT rate. Hyde is one of only seven (out of 100) NC counties that the state allows to spend OT revenue on "any lawful public purpose." Only two counties in the state have a lower OT rate than Hyde's. Forty-four counties have OT rates of 5% or higher. Our neighboring counties of Dare, Beaufort, Carteret, and Currituck have 6% rates. Rival beach areas have higher rates as well: Bald Head Island (6%), Holden Beach (5%), Oak Island (5%), Sunset Beach (5%), Ocean Isle Beach (5%). 

Bill wants to enact the additional 2% OT that Ocracoke has had available to use since 2006. All it takes to start collecting that extra 2% is a vote by the commissioners. It would make the OT rate on Ocracoke 5%; the extra 2% is only available on Ocracoke – the rest of the county can't raise OT. 

As the legislation dictates, in order to charge the 2%, Ocracoke would have to appoint at Tourism Development Authority (5-member board) to decide how to use the additional funds. 2/3 of this extra revenue would have to be spent on tourism development: advertising, brochures, etc. The remaining 1/3 is "more loosely defined" according to Bill. The spending needs to be related to tourism, but can include indirect spending such as solid waste disposal or emergency services (EMS). 

Ocracoke makes about $16 million each year in lodging revenue, collecting about $500,000 in occupancy taxes. With the enactment of the 2% increase, Ocracoke/Hyde County would likely collect another $300,000 each year. What could we do with that?

The budget for the fiscal year 2017-18 that Bill will present at the June BOC meeting includes the assumption that the county coffers will include that extra $300,000. 

Bill would like to see Ocracoke have a combined $800,000 to pay for the island's needs. He pointed out that Dare County uses OT funds for solid waste and EMS, and that a lot of state infrastructure supports Ocracoke. 

"North Carolina is spending $440 million on bridge and road projects from the Bonner Bridge to Ocracoke," he said. "And the ferry division spends $40 million, with $12 million of that devoted just to Ocracoke. I think it's our responsibility to provide the best we can for visitors."

Safety and cleanliness are important for visitors, Bill said. He would like to see improvements to Ocracoke's dump, and give EMS more funding so they can provide more better service.

What's Another 2% Among Friends?

"The county would take $100,000 back out of the 5% OT to use toward EMS on Ocracoke," he said. "I think we are perfectly justified in doing this."

There was not, I would like to point out, any mention of using new funding for public restrooms in the village. 

On May 15th at 6pm there will be a budget workshop meeting to discuss the budget that Bill has proposed for 2017-18. He will ask the BOC to vote to approve that budget on June 5th at the monthly BOC meeting. The budget approval can be tables until the July meeting, if necessary. 

In other OT news, the BOC voted Monday night to approve the OT board funding recommendations for 2017-18. Read all about them here. Commissioners Tom Pahl and Dick Tunnell expressed thanks to the Ocracoke OT board for their difficult decision making. 



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