The Advocate

By Jay Williams, Jr.

There isn’t enough money.

Mayor John Tecklenburg’s proposed 2018 city budget may be balanced, but it doesn’t include additional funding for two priorities — the drainage and flooding crisis and pay raises for city workers. The mayor’s plan is to leave it up to City Council to decide if it wants to fund either of these priorities and if it wants to raise property taxes to do it.

First, let’s recast these unfunded “priorities” as a giant crisis and a budgeting problem, respectively; flooding and pay raises are hardly on equal footing. Second, handing the keys to City Council to decide both the priorities and their funding sources is not a plan. Third, when is enough enough with property tax increases?

For the first time, the city’s property tax revenues won’t cover expenses for our police and fire departments, so how can raising property taxes begin to fund the infrastructure solutions needed to address flooding? One calculation is certain. Laying heavy tax increases onto residents who are still struggling with and paying for flood damage repairs will put an end to downtown Charleston.

We have to think differently.

There are six million annual tourists and only about 130,000 residents in Charleston. Let’s start there.

The ultimate tourism parasite

Cruise ships represent just five percent of the State Port Authority’s (SPA) income, but they represent zero percent of Charleston’s city income! The port of Charleston might be the only port in the country that doesn’t charge a passenger head-tax that goes to the city. So from all those passengers, up to 3,500 per ship with 104 ships visiting Charleston annually, Charleston gets … nothing. Zip.

The potential number of passengers coming here annually is 364,000, nearly triple the population of Charleston.

If we don’t get any money from these passengers, what do we get? We get people strolling around, walking through red lights, leaving litter on the sidewalks, on windowsills and in the streets.

This is an egregious case of asymmetrical benefits. The State Ports Authority gets all the money and the city and the neighbors get the congestion, pollution and problems.

The issue runs deeper, literally. As the former executive editor of the other paper, R. L. Schreadley, recently asked, who pays to dredge and deepen the harbor ports that benefit the SPA and the larger ships they want to bring in? “Who pays for the longer and bigger berths, heavier and higher-reach cranes and other port facilities to handle new inbound and outbound cargo?” Who pays to maintain the roads, bridges and streets that the cargo-laden trucks use to get to and from the port? “That’s you, taxpayers,” Schreadley says, “It’s your capital investment that’s being made.”

Given our investment, the recent South Carolina Court of Appeals decision to deny standing to nearby residents of the cruise terminal is strange. Shouldn’t affected nearby residents have a right to challenge the legality of state-issued pollution permits to protest the pollution, soot, noise, traffic congestion and the negative health risks of the proposed Union Pier cruise terminal?

Residents should be allowed transparency about how things are run and have real input on mitigating the negative impacts created by port operations, but the Court of Appeals and the SPA aren’t interested in what we think.

State Ports Authority CEO James Newsome asserts that cruise passengers represent “maritime commerce,” therefore Charleston tourism regulations don’t apply to them. Then what about those passengers wandering around town who slipped their “maritime” moorings? Maintaining the sidewalks, streets, stoplights, police, ambulances and other city services these tourists use cost money.

With 364,000 passengers at $10 a head, the city should be collecting a large percentage of $3.64 million annually. If the SPA won’t collect it for us, let’s get it the moment those maritime passengers drift through the port’s fence and drop anchor in our city.

Here’s the best solution. Blan Holman, managing attorney for the Charleston office of the Southern Environmental Law Center, suggests that the state should “require an examination of whether taxpayers would be better off selling the terminal property for development and relocating the cruise terminal elsewhere. That would generate much more tax revenue for the county, the city and the state.” Yes, because we know what that examination would reveal.

Union Pier may be the most valuable undeveloped waterfront property on the East Coast. Imagine those 63 barren acres transformed into beautiful tree-lines streets with apartments, shops, restaurants, condos, parks and civic spaces — and the millions and millions in tax revenues this would generate year after year.

Other tourism parasites

Short-term rentals, or STR’s, are big business. Just one of these big online rental companies, Airbnb, pulled in more than $1 billion in the last quarter, that’s a 50 percent increase over the same quarter a year ago. Airbnb is already valued at $30 billion.

“We have the equivalent of two Charleston Place Hotels operating illegally every night,” Councilmember Mike Seekings said. But unlike Charleston Place, these short-term rentals aren’t paying business property taxes and “they’re not paying a business license fee, state and local accommodations taxes or hospitality taxes,” he added. These short-term rentals are also booked online, in secrecy and most are illegally operating in residential neighborhoods.

The myth that all these STR’s are seniors renting out spare bedrooms doesn’t square with the facts that 400 “super hosts” and 200 “multi-listing” hosts operate here and that the total number of online rentals has doubled from last year. Or that investors from here, there and off are snapping up houses throughout the peninsula, driving out local renters, displacing affordable housing and accelerating gentrification.

There are 1815 active nightly Airbnb rentals in Charleston — and only a few of them pay any taxes or fees. The city is losing out on millions in revenue while their “guests” add to the traffic, parking and congestion problems that damage quiet neighborhoods and diminish the quality of life.

STR’s are parasites. As mini-hotels, they need to be regulated, licensed and taxed. Let’s get the money.

Speaking of hotels, let’s add an infrastructure tax surcharge. Hospitality taxes can only be used to benefit tourists, so it’s only fair that the tourists lining up along the Low Battery sidewalk should help rebuild the Wall to protect their safety. They do now, but the city’s share of hospitality taxes is too small and much is earmarked for police and traffic enforcement. Let’s acquire the state’s permission to add a hotel surcharge specifically for infrastructure projects.

Finally, we have a state infrastructure bank. If the city’s seawalls and drainage issues are not infrastructure, what is? People are justifiably mixed about funding I-526, but they’re not ambivalent about stopping the flooding in Charleston and West Ashley. When you don’t have enough money, you set priorities. Let’s shift our priorities and get the state infrastructure bank to help fund a 100-year flood protection plan. Let’s get the money.

Charleston hosts six million tourists for free or nearly free. They come in droves, leaving the 130,000 resident taxpayers to absorb the impacts, pay the bills and prepare for an uncertain future.

It’s absurd.

 

Jay Williams, Jr. arrived in Charleston in 2001 to escape the cold and relax in the warmth of a better culture and climate. This all worked well until May of 2011 when he attended a cruise terminal discussion at Physicians Hall. 

 

 

 

 

 

 

 

 

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