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Hyde County seeks to raise occupancy tax this year by 2 percent

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Kris Noble, Hyde County planning and economic development officer, explains how a Tourism Development Authority on Ocracoke would work. Photo by C. Leinbach

By Connie Leinbach

A new Tourism Development Authority especially for Ocracoke that would raise the lodging occupancy tax rate here by 2 percent, is poised to be approved at the next Hyde County commissioners meeting Monday, March 2, but not everyone has bought into it.

Kris Noble, the county planning and economic development director, announced this last night (Thursday) at a public meeting of the Occupancy Tax Board in the Ocracoke Community Center.

Noble also discussed this proposal at the Ocracoke Civic and Business Association meeting the night before.   She first made the presentation at the Hyde County Commissioners meeting Feb. 2.

“Tourism is the second largest job sector in Hyde County,” she said, “and tourism on Ocracoke is economic development.”

Yet, she noted, there’s a lack of cohesive, fulltime marketing of the island and the county.

This authority would fund the hiring of a full-time Hyde County employee devoted to tourism marketing among the various groups on the island and be a liaison to the mainland.

State legislation passed in 2006 but never enacted allows for the creation of this authority that would be empowered to collect another 2 percent on the 3 percent that’s currently collected on all short-term lodging and cottage rentals. This tax is in addition to the 6.75 percent North Carolina sales tax.

Noble explained that her quest to have this authority approved in two weeks would kick-start the process of selecting a board and hiring an executive director to be in place at the beginning of the next county budget year that starts July 1.

The authority would have five members from Ocracoke (appointed by the commissioners) overseeing the work of the executive director who would be based on Ocracoke.

Noble explained that she and Sarah Johnson, the county public information officer, have worked since last summer researching the state of tourism in Hyde, surrounding counties and elsewhere.

They sent surveys late last year to the approximately 20 island lodging establishments on Ocracoke and received nine responses, but they did not survey the rental cottage agencies, Johnson said.

Bob Oakes, owner of Ocracoke Island Realty

Bob Oakes, owner of Ocracoke Island Realty. Photo by P. Vankevich

“Increasing this tax will be a huge mistake,” noted Bob Oakes, owner of Ocracoke Island Realty, the largest cottage rental business on the island. “You have an anemic sales market.”

One of the slides Noble showed in her presentation was sales-and-use tax collected county wide from 2010 to 2014.  In 2014, the county is slated to collect more than $1.2 million in sales tax, which is down from the high of $1.3 million collected in 2012.

But the total occupancy tax the county is slated to collect will be more than $442,000, which is the highest amount in the last five years.

“With all the problems with the ferries and Hatteras Inlet, that’s pretty good,” noted Rudy Austin, OCBA president.

Of that yearly total collected, 10 percent goes to the Hyde County finance office for administration.  The rest can be granted out for any community purpose, such as operating expenses for the fire department and island projects.

An added 2 percent occupancy tax could yield $275,000 to $295,000 per year, Noble said. Of that, only 3 percent would go to Hyde County for administration.

“Any tax that targets one group is unfair,” said George Chamberlin, owner of Captain’s Landing. “The fairest tax would be a sales-and-use tax.”

George Chamberlain

George Chamberlin, owner of the Captain’s Landing.  Photo by P. Vanekevich

In his lengthy remarks, he questioned if the county was comparing Ocracoke to cities where one has a vast choice in lodging, both privately owned and national chains.

“In the summer, you can’t compare our market with others,” he said.  “You say this tax is ‘just a little bit and doesn’t count for much,’ but it does.”

Several attendees (of about 25) noted that they don’t like the idea of having two boards dealing with distribution of tax monies.

'Alan Sutton 2015-02-12 22.05.08

Alan Sutton, owner of Tradewinds Tackle Shop. Photo by P. Vankevich

Moreover, this tax would not affect the day trippers, whose numbers might increase with the addition of passenger ferries, noted Alan Sutton, owner of Tradewinds Tackle Shop.

“We have so many needs here that the Occupancy Tax pays for,” he said, such as the fire department and EMS that counties elsewhere pay for from tax revenues.

But Noble pointed out that the legislation is written to enact an occupancy tax.

“I have an obligation to make life better for everyone in the county,” said Hyde County Manager Bill Rich via cell phone. “This is an opportunity for more money from outsiders without raising taxes.  We don’t have to share it and don’t have to give any of it back to the state.

“This (added tax) allows us to grow the shoulder seasons, and that’s where I see a huge opportunity for Ocracoke and Hyde County.”

Islanders Thursday night had concerns about the speed at which the county wants to enact this authority.

“I don’t see the rush,” said Darlene Styron-Doshier. “We have problems with Hatteras Inlet, Highway 12 and getting people here.”

The Occupancy Tax Board should take some of its reserve money and hire a full-time person—or have another group hire someone–to do this work for a year first without raising the occupancy tax, noted Bob Chestnut, owner of Ride the Wind Surf Shop.

Bob Chestnut, owner of the Ride the Wind  Surf and Kayak shop. Photo by P. Vankevich

Bob Chestnut, owner of the Ride the Wind Surf and Kayak shop. Photo by P. Vankevich

“Who is disappointed in Ocracoke?” asked Fred Westervelt, owner of The Cove B&B. “What are we trying to accomplish except raise more money?

“We are beset by a tyrannical federal government that isn’t helping the situation and environmentalists in the way of Ocracoke doing its thing,” he continued. “That’s what makes us attractive.”

Noble also noted that neighboring counties Dare and Carteret have occupancy tax rates of 5 percent of which the statutory cap is 6 percent.

“There’s a movement to make the occupancy rate uniform throughout the state,” she said.

In other action, the board heard a presentation on Ocracoke having fireworks on July 1.

Sundae Horn, the OCBA travel and tourism director, outlined how fireworks could be done by Pyrotechnico of Columbia South Carolina, one of the top fireworks companies in the nation, which also does Avon’s fireworks show.

According to Horn, at this late date, the only day the company could do the show would be on July 1. With July 4 being on a Saturday, which is one of the cottage-rental change-over days, a mid-week show would accommodate those staying the week prior to the holiday and might also prompted others here for the holiday weekend to extend their stays.

The Hyde County commissioners at their Feb. 2 meeting approved their being the sponsor of the event, relieving the OCBA of that task.

In  the morning on July 4, 2009, the fireworks for that evening’s show suddenly exploded while they were being unloaded from the hired company’s truck, killing four fireworks company employees and injuring others.  Since then, Ocracoke has not had fireworks on July 4, though in recent years, businesses have asked for their return.

The cost of the show would be $37,500, which includes an 18 to 21-minute show, about $13,000 for a private barge from which to launch them in the Sound off the NPS public dock, $500 for lodging for the Pyrotechnico crew and a contingency of $6,000 in case of postponement.

The Occupancy Tax Board will make a decision on this soon.

 

 

 

 

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2 replies »

  1. wow, I did not know about the explosion in 2009. How tragic. I think that amount of money is a huge expense and not worth it. That amount of money would fund an art teacher for 2 years.