Occupancy tax hike for beaches is back in play

By on June 18, 2013

N.C. 12 in Kitty Hawk during Hurricane Sandy. (NCDOT)

N.C. 12 in Kitty Hawk during Hurricane Sandy. (NCDOT)

A 1 percent occupancy tax increase is set for a public hearing next month as Dare County commissioners consider raising more money to widen beaches in three towns and on Hatteras Island.

The increase, which can only be used for shoreline management projects, was authorized in 2010 by the General Assembly when Nags Head was developing its 10-mile-long beach nourishment project.

County commissioners never enacted it because the Shoreline Management Fund had more than enough money to pay for half of Nags Head’s project and Kill Devil Hills had put widening its beach on a back burner.

Nags Head financed the other half of its roughly $36 million project.

Now, Kill Devil Hills is moving forward again with a 2-mile project that could cost up to $20 million, Duck is well into planning for a $10 million to $12 million project, and Kitty Hawk is looking at ways to control flooding and protect a stretch of beach prone to breaches during storms.

“Each of those towns has requested that we implement that tax to help them fund those projects,” County Manager Bobby Outten told the Board of Commissioners Monday.

One percent of the 5 percent tax on vacation rentals already goes into the county Shoreline Management Fund. The most the county can charge is 6 percent.

Outten estimated that the three town projects together will push $50 million. And that does not include the county’s plans for widening beaches at Rodanthe and Buxton.

“If we’re going to do this, we kind of need to do it pretty soon because we’ve got to let the property management companies know what we’re doing so they have time to set up their contracts, notify their people and get everything going before they start taking rentals for next year,” Outten said.

The fund’s balance is projected to be $16.9 million by the end of the year.

Planning and permitting for the new projects is expected to take two to three years. By the end of 2015, the fund is projected to stand at $19.6 million without the new tax. With another 1 percent, the fund would grow to $24.6 by the end of 2015.

Under the same funding formula the county used with Nags Head, the other towns would receive half of the money they need from the county. It is not known yet how much the county’s project on Hatteras Island will cost.

The hearing is July 15.

Comments are closed.