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Proposed occupancy tax rate increase on Commissioners’ agenda today

Hyde County services center in Swan Quarter. Photo: Kris Noble

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Hyde County Manager Bill Rich tonight will propose that the county raise the Occupancy Tax rate by 2 percent for the 2017-2018 county budget.

This idea will be discussed tonight before Rich makes his annual budget presentation, and it would be voted on at the June meeting.

Currently, all customers of hotel rooms and rental houses pay an additional 3 percent in Occupancy Tax on top of the 6.75 percent state sales tax. Rich proposes to increase the total Occupancy Tax rate to 5 percent.

The additional 2 percent would be managed by a Tourism Development Authority, and Rich said this additional amount, which he projects to yield another $300,000 per year, could pay for emergency services on the island as well as advertising for the entire island through the Ocracoke Civic and Business Association.

Revenues from the other 3 percent would be awarded to island nonprofits as they always have been, but there would be more available for recipients.

“We don’t have the income,” Rich said about what services the county needs to fund. “Income is declining from real estate valuations and contributions from the state and federal governments.”

Rich is planning a meeting May 15, 3 p.m. at the Community Center with island lodging industry owners, the Occupancy Tax Board and the OCBA about this proposal.

In background materials on the commissioners’ page of the Hyde County website, documents from Magellan (the company that the OCBA has hired to research the island and formulate an advertising plan), show that the counties surrounding Hyde all charge a 6 percent occupancy tax rate.

However, Chowan County’s rate is 5 percent, which is the amount Rich proposes raising this tax to.

Rich will also say in his budget message that Hyde County property owners can expect the property tax rate to increase with this budget. The county now receives $6.5 million in property tax income. So, the tax rate increase will enable the county to still collect that $6.5 million. By law, the county cannot compensate for the new valuation any more than the $6.5 million it already collects from property taxes.

“As a result of a total loss of property valuation county-wide, the property tax rate will go up by several cents this year, Rich said last week.

“The county will collect the same tax dollars, but people will pay more or less according to their tax value,” Rich said.  He expects the tax rate to increase from the current rate of $.0064 per $100,000 of assessed valuation to $.0071 or $.0072.

“We lost about $100 million from the economy just in evaluations going down in the last seven years. That’s 10 percent.”

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