Local

Is tourism marketing money being spent on the wrong things?

Local and state governments don't just dole out accommodations and hospitality taxes for others to spend on tourism promotion.

They keep a hefty chunk for themselves, too.

State law limits how that money can be spent -- some can go to general funds, but most is supposed to enhance tourism.

For example, a coastal town might build public showers near the beach, or a county could pay for the extra fire and law-enforcement service to protect its visitors.

But at least one Lowcountry tourism marketer says some local governments could be misinterpreting the laws and inappropriately spending money that could go toward tourism marketing.

Carlotta Ungaro, head of the Beaufort Regional Chamber of Commerce, questions, for example, $1.2 million in hospitality taxes that Beaufort County shifted to its general fund in the 2009-10 fiscal year.

That money was used to meet the demands imposed by tourists, said David Starkey, the county's chief finance officer. Most went to the Beaufort County Sheriff's Office, and some also paid for emergency medical services and public works, he said.

The county has no method for measuring the demand for services tourists create, but Starkey said the amount the county kept -- about one twenty-fifth of the combined sheriff, EMS and public works budgets and about one 100th of the county's $100 million-plus operating budget -- probably underestimates tourism's true cost to the county.

"That transfer is rather conservative in the grand scheme of things," Starkey said. "I think it's safe to say more than 1 percent of our general fund expenses are related to tourists."

Ungaro doesn't object to the county using some hospitality tax money for the sheriff's office, but she wants more of the money to go to marketing, which would more directly benefit the businesses that bear the burden of the tax, she said. She also said the county should more clearly account for those taxes once they enter the general fund.

Ungaro also questions why county officials have discussed funding improvements to Camp St. Mary's, a county-owned property in Okatie, using local accommodations tax revenues. Neither Ungaro's organization, the Hilton Head Island-Bluffton chamber nor a recent state study have identified that property as a tourist attraction, she said.

"I'd love to see what they plan to do with it," she said. "Is it for tourism, or is it for citizens?"

Ungaro also questions how the city of Beaufort spends its hospitality tax revenues.

The city devotes 4 percent to the Beaufort Regional chamber, 1.1 percent to Main St. Beaufort, USA, and the balance to its general fund to maintain the city's parks and streets, comptroller Mack Cook said.

Cook said he considers such general fund transfers appropriate because they help keep the city in the condition tourists expect. He said he would welcome further direction from the state about how to separate tourist-related services from resident-related ones.

"Somebody come up with the formula, and I'll be happy to work with it," Cook said.

Frans Mustert, a Myrtle Beach hotelier and chairman of a group that oversees how state accommodations tax revenues are spent, has no say over either of the local taxes that are tourism-related. The rules about which expenditures are allowed are similar, however.

Mustert said he questions spending on parks if they don't attract tourists. He also considers transfers to the general fund to be questionable because governments should be able to show the money went specifically to tourism-related purposes.

"I think they're skirting (the law) by putting it to the general fund," Mustert said.

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