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Editor’s note: This article has been revised to reflect the correct percentage of the additional 2 percent in occupancy tax Hyde County would receive for administration.
By Connie Leinbach
A meeting with Ocracoke lodging owners, the Occupancy Tax Board and the OCBA board to discuss a proposed occupancy tax rate is scheduled for 3 p.m. Monday, May 15, in the Ocracoke Community Center.
Hyde County Manager Bill Rich in his 2017-2018 budget message to the Hyde County commissioners at their monthly meeting Monday night proposed to raise the occupancy tax rate to 5 percent, up from the current rate of 3 percent. This tax is added on top of the 6.75 percent sales tax to all hotel room and rental house fees.
“It is totally justified to ask for this,” Rich told the commissioners.
Monday’s meeting is for a conversation with lodging owners, the Ocracoke Civic & Business Association board and the Occupancy Tax Board, said Tom Pahl, Ocracoke’s county commissioner. While the public may attend the 3 p.m. meeting, Pahl said county officials want to talk first specifically with these groups.
Public comments will be welcome later that evening when the commissioners continue their 2017-2018 budget hearing at 6 p.m. in the Community Center.
Rich explained Monday night that the N.C. state Legislature in 2006 approved Hyde among seven other counties to impose this additional 2 percent rate to create a tourism development board (TDA).
The 3 percent occupancy tax was enacted in 1992, he said. A five-member board composed of island residents oversees and awards grants to nonprofits from this fund, which collects about $450,000 each year.
An increase in this tax rate would free up more money from the current Occupancy Tax fund for island nonprofits, he said.
Counties surrounding Hyde have occupancy tax rates of 6 percent, with the exception of Chowan, which has a 5 percent rate. Of the 100 counties in the state, 45 or 46 have a 6 percent occupancy tax rate, Rich said.
Rich projects an additional $300,000 could be collected from an additional 2 percent occupancy tax. Two thirds of the total collected would have to go toward tourism promotion, he said, such as advertising by the Ocracoke Civic & Business Association. The rest could fund EMS and trash services on the island since both of these serve visitors as well as islanders.
“We want to provide the best services for these tourists when they step foot on the island,” he said.
By law, the county is allowed to take 10 percent from Occupancy Tax revenues for administrative costs. In the case of the proposed additional 2 percent, the administrative portion going to Hyde County would be 3 percent.
Another board would be required to oversee and award grants from the TDA.
The public also may give comments on the proposed budget at the commissioners’ June 5 meeting at 6 p.m. in the Community Center.
In other business, the commissioners heard a request by Pahl to form an Ocracoke Waterways Commission to work on dredging and ferry issues in the Hatteras Inlet.
Since 2013, when increased shoaling in the inlet caused the cancellation of the short ferry route across the inlet, a longer route farther west in the Pamlico Sound was found and then sanctioned in 2014. While this route is crucial to access to the island, the longer crossing time has resulted in fewer ferries being able to make the runs, resulting in fewer daily visitors to the island and longer wait times at the Hatteras dock.
Pahl said he would work on what this commission would do and who would be on it before the June meeting when the commissioners would approve it.