Hilton Head Island Mayor Drew Laughlin said Wednesday the town should ask the legislature for permission to increase the accommodations tax and use the revenue for marketing to attract more visitors to the island.
Speaking before 700 people at the Hilton Head Island-Bluffton Chamber of Commerce's 17th annual State of the Region breakfast, Laughlin said other South Carolina communities whose economies depend on tourism devote far more resources to marketing than Hilton Head.
He also said the town's overall tax on lodging is below the national average, and the town should seek authority to raise the local accommodations-tax levy beyond the 3 percent state cap. Raising the bed tax by about 2 cents on the dollar would bring it more in line with the national average.
"Our total marketing budget coming out of Atax is $1.3 million or $1.5 million a year. That is a paltry sum to market a destination community," he said. "Myrtle Beach (which has a 1 percent local-option sales tax) outspends us 12 to one. That needs to change."
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State law allows municipalities to add an accommodations tax as high as 3 percent on short-term lodging to the state's 7 percent sales tax on lodging.
A 2008 study by The American Hotel & Lodging Association pegged the national average tax for hotel rooms at about 12.6 percent per night.
Charlie Clark, spokeswoman for the Hilton Head-Bluffton chamber, which receives funding from the town's share of the bed tax, supports the mayor's proposal.
"Our residents don't have to put in a single dime, and they would greatly reap the benefits," she said.
Laughlin also touted the town's efforts to promote economic development and revamp its land-management codes. He proposed a community discussion on funding for local arts programs, many of which struggle to remain open despite already receiving some bed-tax funding.
"They are going to have to raise more money, either by public contributions, private contributions or otherwise," Laughlin said. "If we want to keep a symphony orchestra here, if we want to have an arts center here, if we want to have those arts offerings that I think are critical for our success, the existing structure and arrangement is just not going to work."
Bluffton Mayor Lisa Sulka and Beaufort County Council Chairman Weston Newton also addressed the audience at the Westin Hilton Head Island Resort & Spa. Both touted successes over the past year and explained challenges ahead.
Sulka told the crowd that Bluffton must continue efforts to improve the May River despite the price tag.
Newton, who has been County Council chairman for a decade, touted the county's transparency efforts, stormwater programs and its track record of maintaining -- and in some cases, expanding -- services without raising property taxes.
He also warned residents about next year's state-mandated property reassessment, which could lead to higher taxes for some property owners despite lower property values.