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Sales tax: Voters ask if referendum does enough for the port

By Charles Swenson
Coastal Observer

Most of the dozen people who showed up for a presentation on Georgetown County’s proposed capital sales tax didn’t need to be sold on its centerpiece: funds to help dredge the shipping channel for the Port of Georgetown. But they questioned whether the 1 cent tax does enough for the project.

Voters will decide Nov. 4 whether to implement a local sales tax that will run for four years and be earmarked for capital projects. It is expected to raise $28 million with $6 million serving as the local contribution to a $33.5 million port dredging project.

If approved, the sales tax will also fund dredging in Murrells Inlet ($10.3 million), an emergency services building in Andrews ($1.5 million), rural fire stations ($1.5 million) and resurfacing of 45 miles of state roads ($8.9 million). County Administrator Sel Hemingway said he will recommend the county borrow the funds and repay them with the sales tax revenue so all the work can be done at the same time.

Hemingway has spoken to community and business groups about the capital sales tax plan. Monday’s meeting at Waccamaw High was the first of four forums scheduled this week.

John Morris, a Litchfield resident, questioned the need to raise $28 million in tax if the $6 million for port dredging is the key project. “It could have focused all the attention on the port,” he said. “The roads that are on this aren’t going to contribute in any way to the port.”

Richard Kerr, a member of the county Board of Education and former CEO of a metals company, said more infrastructure will be required at the port to handle any increase in cargo and to move it in and out of the county. “I don’t see anything addressing that part of it,” he said. “I don’t see enough scope here.”

County Council Member Bob Anderson said he opposed a capital sales tax proposal in 2012 because it was too broad. He supports the current plan because the port is the top priority and he believes it will stimulate economic growth in the western part of the county. But he said the sale tax referendum needed to have broad political appeal.

“There are pockets in the county that could care less about dredging,” he said, adding that many retirees are Waccamaw Neck are among them.

Based on a 2010 economic study, the county believes it will gain 42 jobs and $1.3 million in household income for every additional 500,000 tons of cargo the port attracts. And Hemingway said the State Ports Authority has told him it believes dredging to the authorized depth of 27 feet will raise traffic by a million tons a year. That increase would also qualify the port for federal funds for maintenance dredging.

Hemingway said he has no commitments from shippers. ArcelorMittal, which operates the steel mill in Georgetown, has said it will shift its cargo from Wilmington, N.C., and the ports authority expects the volume of cement shipped through the port will increase.

“I will guarantee you 100 percent – fully guarantee – if we don’t dredge that port we won’t get any ships in,” Hemingway said.

The state law that allows the local sales tax requires it to be implemented in two-year increments. That shaped the form of the referendum, he said. At $7 million a year in revenue, a two year tax would raise enough for the Georgetown port, but not enough for Murrells Inlet. Like the port, the channel through the inlet is the responsibility of the Army Corps of Engineers, but there is no money in the federal budget for the project.

Hemingway said he is often asked why the Murrells Inlet project is earmarked for more funds than the shipping port. The difference, he said, is that the county will pay the entire cost of dredging the federal channel and four finger channels near the Marsh Walk. The work is needed to preserve water access and property values, he said.

Kerr suggested getting Horry County to share the cost since it also benefits from the dredging.

“I would not argue that point,” Hemingway said.

But Council Member Jerry Oakley urged voters, “Don’t let the perfect be the enemy of the good.”

The channel is in Georgetown County and without it, the tourism industry in the inlet is at risk, he said.

“We’re doing things here at the county level that the state or the federal government won’t do,” Anderson said. As a “staunch conservative,” he doesn’t want to create a new tax, but he said he can’t ignore the needs.

Morris said he understood the calculations that went into the sale tax proposal, but “I’m not sure I agree,” he added.

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