Southern Shores OKs occupancy tax hike
Southern Shores reversed itself Tuesday and voted to support a 1 percent increase in the occupancy tax to help pay for beach nourishment.
Two weeks ago, the Town Council issued a statement critical of Dare County’s record on shoreline management and said it “respectfully declines” to support an occupancy tax hike to finance the debt on Nags Head’s $36 million plan.
Since then, the Shoreline Management Commission, which is made up of representatives from the six towns and Dare County, has broadened the proposal to include other erosion-control methods and possibly other towns.
“I really at this stage of the game would like to see us support the 1 percent tax,” Councilwoman Jodi Hess, the town’s representative on the shoreline commission, told the Town Council Tuesday.
The commission had asked Hess to seek a second opinion as it mulls over how it will recommend spending the money in a beach nourishment fund and whether the county should ask the General Assembly for approval to add 1 percent to the 5 percent tax.
On the table is a proposal to use the shoreline fund to pay for half of Nags Head’s $36 million beach nourishment proposal and half of any plan Kill Devil Hills comes up with. A condition would be that a town would need an approved plan and other funding sources.
If an additional 1 percent on the tax is enacted, Nags Head would receive $2 million a year for five years and $1 million a year would be set aside for Kill Devil Hills. Estimates on how much 1 percent would generate have ranged from $3 million to $3.4 million a year.
The General Assembly, which meets in a short session starting next month, must authorize increasing the tax, and Dare County would have to enact it. The county is seeking a consensus because only non-controversial bills are considered in the legislative short session.
Since 2002, an existing 1 percent has been going into the Dare County Shoreline Management Fund, which is expected to stand at $22 million by June 30. The shoreline commission is an advisory panel and the county Board of Commissioners will decide how to spend the money.
Since Nags Head announced its project in January, funding for beach nourishment has been heavily debated. The towns were reluctant at first, but one by one they’ve gotten on board. All feel they have some claim on the fund and they don’t want to see it used up for one town’s project.
Kill Devil Hills made the tax increase proposal more palatable in a resolution it passed that included other methods, such as jetties and terminal groins, as additional possibilities for the extra 1 percent. The shoreline commission is considering a recommendation with similar language.
Southern Shores Councilman Kevin Stroud still wasn’t buying it. He expressed concerns that 50 percent funding was too vague and wanted a limit on how much money could be taken out of the shoreline fund.
“If that language was there, I’d be in favor of it,” he said.
Stroud, drawing a parallel to escalating costs for his town’s troubled canal-dredging project, was not convinced that Nags Head’s plan would end up at $36 million, speculating that “36 is going to become 60 or 70.”
Nags Head Mayor Bob Oakes, who attended the Southern Shores meeting, said the plan proposed by Warren Judge, chairman of the Dare County Board of Commissioners, included language that would leave $5 million to $10 million in the fund as a cushion for emergencies.
The council voted to endorse the tax without a specified limit. Stroud did not vote and was recorded as a yes vote. Councilman George Kowalski was absent.
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GB says:
There is no such thing as a free lunch or a tax increase that does not have consequences. When Southern Shores owners pay higher property taxes and county and town services are cut because the existing county budget can’t be balanced, we will know why.
Increasing the occupancy tax to help Dare County and the towns provide effective services and jobs (fire dept, canals, roads, lifeguards) is one thing, but increasing the occupancy tax to fund the shoreline commission plans will result in higher taxes for every property owner in Southern Shores now or in the future since the occupancy tax money will be off the table…spent on dredged sand.
Duke says:
I am not having a problem with raising the occupancy tax for nourishment. It is paid for by the tourists and I reap the benefit. As for the ad valorem increase, we can’t stay at the same rate forever. No one wants an increase but I always felt we get a pretty good bang for the buck here in Dare County. What is going to startle everyone, is the re-evaluation. The ocean and sound front homes and commercial properties have been paying a disproportionate amount since the last evaluation. This will be corrected this time and we can expect average and west side homes to pay a higher share. That is inevitable. Sort of like redistributing the wealth that has become so popular.
Ray says:
As a resident of Southern Shores, I have become less and less impressed with our town officials, lately. First, we cowed down to the fire department money grab (after last year’s fiasco); and now we cow down to the sand tax zealots.
Apparently, Southern Shores’s leaders are anxious to jump into the same leaky financial boat with Dare County and take us all with them.
Joel Rifkin says:
“Kill Devil Hills made the tax increase proposal more palatable in a resolution it passed that included other methods, such as jetties and terminal groins, as additional possibilities for the extra 1 percent.”
Jetties and terminal groins? Jetties and terminal groins made the tax increase more palatable? How can the Southern Shores Town Council possibly say jetties and terminal groins make a tax increase more palatable since Southern Shores will NEVER see a penny from the beach nourishment fund for either (which, I guess is a good thing)?
Regardless, something just isn’t right here.
Ray says:
I wrote separate e-mails to all Southern Shores town council members this morning expressing my disappointment in their decision to renege on their earlier stance against the tax increase . . . It appears this is another poor example of the leadership that Southern Shores is exhibiting on this issue and the fact they will probably continue to be at odds with what each other on how to best represent the voters. Sad, very sad…
Poseidon says:
The beach sucks now anyway with all the traffic and strip malls and trash. I’ve been in this area all my life and the way it used to be was the best. This tiny strip of barrier islands has become a disaster area. I tell everyone, why would you come here, to look at the beautiful steel power poles and the bypass? Who would ever want to spend that much money to be stuck in traffic? The very natural beach experience is being buried by the towns and pavement. I hardly recognize the place anymore. I feel confident that the Atlantic will strike again because the ocean will always be in charge and what a mess it will be when it floods from the beach to the soundside.
GB says:
Here is how the numbers work for every Dare County resident assuming our population is 35,000. $18 million spent now on nourishment is $514 per person donated to the cause. The occupancy tax increase will generate 3 million per year, and over 5 years that is another $428 per person donated to the cause for a total of $942 per Dare County Resident.
For me, with my two children and wife, Southern Shores just jumped on the bandwagon and tried to give away $3,768 from my family to put sand on the beach in Nags Head and KDH.
I understand that its not money directly out of pocket, but it will be spent for every Dare resident with the result being a combination of reduced services, higher taxes, and no benefits from this very expensive endeavor for most residents.
We could raise the occupancy tax and LOWER property taxes…instead its hard to see why we are considering cutting teachers and emergency workers countywide and at the same time decide that it’s a good idea to endorse a new version of the sand tax to spend millions in South Nags Head.
Allocating the funds to the shoreline commission forever instead of the general fund is a mistake for the county and every town. Not only are they advocating to pump dredged sand, now they are pushing for jetties and groins (big rocks) on the beach. I am all for alternatives to nourishment, but this was not what I had in mind.
I don’t know about everyone else, but I am working harder than ever this year and we are eating rice and beans by choice. I feel grateful for the work, but we’re not spending extra money. I don’t want to raise taxes to dump sand on a shoreline that is eroding at 10 feet per year. Why our elected representatives are so out of touch with this reality and the economic pressures on voters is frightening.
By appearances this may seem like every town is “on board,” but if anyone thinks that Sand Tax II is not controversial they are severely underestimating the situation and the mood of the voters.
Ray says:
I almost croaked when I saw Perry White, a local Republican official, stand before the Dare County Commissioners on Monday and say that everyone but two people at some Republican gathering was in favor of groins on the beach. With Judge and his board grinning, it was all I could bear. Then later County Manager Bobby Outten stood and gave the same distorted explanation of what the study commission came up with on the matter. Outten and the commissioners want everyone to believe the study group said groins were OK, as long as they are in combination with a beach nourishment program, along any beach. Not so…the study group was only referring to a bn program adjacent to an inlet. And, this is just another way proponents of throwing sand into the ocean will distort the facts…Unbelievable..
Bob O says:
OCCUPANCY TAX IS NOT PAID BY RESIDENTS!
Dare County generates the highest sales tax revenue per capita in the State of North Carolina. It’s not because each one of us buys that much stuff, as GB might have you believe when he divides the occupancy tax into a per person in Dare County. It’s because of our visitors.
These same visitors are reacting to the erosion issues in South Nags Head. If we don’t take some action, we will lose tax base and tax revenue – just look at the Comfort Inn. The occupancy tax is not paid by residents, so it’s really the only acceptable source for the huge cost of a nourishment project. And GB’s family won’t pay a dime of that money unless they rent a vacation home. In fact, the protection offered by beach nourishment may insure that there is actually a community here in 50 years when the kids grow up.
GB says:
If we raise the occupancy tax and permanently designate these funds to be specifically earmarked for beach nourishment, then there is an opportunity cost that every resident will pay. By spending the increased funds on sand dredging, we will also be choosing not to spend those funds on schools, emergency services, county employees, etc.
Dare County and the towns can collect a finite amount of revenue from occupancy taxes under the current state laws. Currently we collect the following: 3% goes to the general fund, 1% goes towards tourism marketing (funds visitor’s bureau) and 1% currently designated to go to beach nourishment for a total of 5%. This is in addition to the 6.75% sales tax paid for every week rented or hotel room booked.
The maximum total occupancy tax that is allowed by state law is 6% and we currently are at 5%. So we have one more percent in reserve in occupancy tax to meet some need in the future.
If we increase the occupancy tax, I feel that the money should go to the general fund. This will help each town enjoy the revenue and help the towns and county prevent or minimize a property tax increase in the future. This way, when funds are spent, they are subject to the same budget review process as most other tax dollars. While many folks may like the idea of beach nourishment, when we have to make the hard decisions of where the tax revenue is spent and we compare the cost of nourishment vs. the cost of an ambulance, or a teacher’s job, or a police car or any other of the important ways we currently use our tax revenues, the numbers become more clear and our voters will be able to make better decisions about revenue allocation.
If through the normal budget process we decide to spend money on sand, then so be it. But the proposal to increase the occupancy tax only for one cause does cost every resident money. Each tax dollar collected can only be spent once, and if we spend it on nourishment, we are then not able to provide another service or we are that much closer to a property or sales tax increase to fund other existing, necessary local government functions.
It should also be noted that we will have a thriving community here in Dare County in 50 years whether we choose to nourish Nags Head or not. No matter our decision at this point, the shoreline will continue to change and the beach nourishment project currently proposed is in my view an expensive, narrowly focused, short term attempt with questionable prospects for success. I know that many feel that we should do something…but this does not appear due to economic and other factors to be a wise first step.
If nourishment is part of a larger strategy and we have federal and state resources to help, then it starts to make more economic sense for Dare County. That is currently not the case. I hope that we can work together to find a larger, longer term, less expensive, and more holistic and effective approach to solving the erosion problem. Unfortunately retreat in some areas will be forced upon us and retreat should be integrated into the plan so that consequences to individuals and communities can be minimized whenever possible and reasonable. Offshore breakwaters (not terminal groins or jetties), relocation and long-term planning hopefully will be part of this process.
Ray says:
I have to disagree, Bob. While it is true that Dare County residents might not pay the occupancy tax; that same tax could be collected and put into the county’s general fund to help pay for all the extra governmental services required on account of our tourism economy. And, by not doing that, we have to raise our property taxes to balance the budget. So, indirectly, we will pay more in taxes if this last 1% on the occupancy tax is tossed into the ocean.
Fish says:
I think GB and Ray have this right. By making that 1% JUST FOR SAND, we have no flexibility.
If it goes to the general fund, in years like this one, where the most important thing for the County to do is keep jobs, keep emergency services, keep the schools strong, we could move $ to those MORE CRITICAL efforts.
Ever think of this? What if you took 4.1 million out of the sand account RIGHT NOW to balance the budget? Wouldn’t people cheer you, Commissioners? Instead of what they’re now doing on MY street, which is cursing your names?
People forget, a huge majority of the locals here just HATE and DETEST the idea of pumping $ into the ocean. It makes us look like idiots to the rest of the world.
Scott says:
As a LONG time visitor to the Outer Banks (35 years), I am compelled to echo the sentiments of Poseidon. Around the same time that the Outer Banks became OBX, the area crossed well over the line of sustainable development and desirable vacation destination into over-development and vacation purgatory. The only thing left as a draw for many of us long time visitors is nostalgia and memories, because the Outer Banks is gone, slowly but surely reinvented as Jersey Shore South. We’ve been shopping half-hearted for alternate vacation destinations this past year and the possible 1% occupancy tax hike is the straw that broke the camel’s back. Perhaps Sandbridge…