Bill from Hamilton: Municipal sales tax for beach nourishment money

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A proposed new source of support for the beaches of North Carolina pends in the legislature.

A bill filed just under deadline in the N.C. General Assembly this month seeks to allow a new, half-percent sales tax that would raise proceeds for beach nourishment among other uses.

The state’s coastal towns have long desired a new fundraising mechanism that would free up or reduce the need to manage their shorelines with property tax money–particularly under a feeling that financial aid from the federal government is thinning away.

House Bill 962, filed April 17 by N.C. Rep. Susi Hamilton (D-New Hanover), would authorize municipalities to levy an additional half-percent local sales and use tax, which the state would collect and distribute to the participating towns monthly.

N.C. Rep. Susi Hamilton

In addition to beach nourishment, the revenue could help pay for streets and sidewalks, traffic signals, street lighting, signage, emergency services and “public events and festivals,” the bill says.

Local beach town officials are following the bill’s progress.

“Obviously, future funding for beach projects is uncertain,” said Wrightsville Beach Town Manager Tim Owens. “I think towns need as many tools as possible to be able to fund these types of projects.”

Owens pointed out that the only other local sources are the revenues from property and room-occupancy taxes, the latter charged to hotel stays and other accommodations. He said he had yet to analyze the revenue possibilities from the new sales tax proposal.

The strands of Carolina Beach and Kure Beach are now in the window of a federally supported beach nourishment, officially termed a “coastal storm damage reduction” effort. The $11.5 million project there is 65-percent federally funded; the rest is shared by the state and New Hanover County’s room-occupancy tax fund.

Wrightsville Beach expects a similar federally partnered project in winter 2013-14. While longer-term federal backing for beaches remains an unknown, the town is marked for $8 million from the president’s 2014 budget, which Owens noted must still go through the congressional approval process. State budget drafts in the N.C. General Assembly mark more than $1 million for the project.

In February, a consultant told the Town of Carolina Beach it should prepare for the possibility of losing federal and state funding support by saving about $550,000 or more per year in local funds specifically for beach nourishment.

“Estimates indicate that [Carolina Beach] would have to raise taxes more than 3 cents to meet projected costs in an emergency,” said Bruce Shell, Carolina Beach’s interim town manager, adding that a sales tax could be the better way. “A tax paid for by tourists makes a lot of sense rather than the property or residents, especially when you think of who enjoys the beaches.”

To implement the half-percent sales tax, if approved, the towns’ governing boards would have to adopt resolutions expressing the intent, after giving the public a chance to speak on the proposal.

The City of Wilmington’s legislative agenda had also noted the need for new revenue streams for “shoreline preservation, restoration and beach renourishment.” But during a planning session in November, Councilwoman Laura Padgett suggested that should also include a focus on the downtown riverfront.

“We don’t have a beach to renourish. We have totally supported our riverfront ourselves,” Padgett said at the time. “We have not gotten a dime from the beach renourishment funds to take care of this very expensive waterfront.”

The bill as written lacks apparent language to that end. It is in its first edition and sits currently in a House review committee.

City of Wilmington legislative liaison Tyler Newman said Monday the city is in conversation with Rep. Hamilton about adding broader “shoreline preservation” abilities to the bill that would allow proceeds for the riverfront.

Hamilton was not immediately available to discuss the bill Monday.

Complete details about the proposal are viewable here.

Ben Brown is a news reporter at Port City Daily. Reach him at ben.b@hometownwilmington.com or (910) 772-6335. On Twitter: @benbrownmedia