May 8, 2015
Newest board idea for dredging not legal, Cook aide saysPursuing funds for dredging Oregon Inlet has become akin to “follow the bouncing ball.”
By SANDY SEMANS
its meeting on Monday, the Dare County Board of Commissioners requested
that the General Assembly approve using $5.5 million from the beach
nourishment fund for dredging Oregon Inlet.
The funds were
collected to use for beach nourishment under a 1-cent sales tax before
it was repealed through a ballot measure in 2006. What is left of the
money collected is part of the larger beach nourishment fund, currently
sustained by 2 cents in occupancy tax, and is used for such things as
sand fencing and planting dune grass.
But on Thursday, Jordan
Hennessy, Sen. Bill Cook’s legislative aide, responding to press
questions on behalf of the senator, said that won't fly because the
purpose of the money can’t be changed due to the North Carolina
Constitution’s Article V Sec. 5 which states: “Every act of the General
Assembly levying a tax shall state the special object to which it is to
be applied and it shall be applied to no other purpose.”
can change the special object of the taxes collected moving forward but
you can’t take proceeds of taxes imposed and collected for object X and
apply it to object Y,” Hennessy wrote in response to questions.
Manager Bobby Outten said this evening that he couldn't comment about
the sales tax money not being accepted for change because he has
not been notified that it isn't an acceptable proposal.
Dare County Board of Commissioners Chairman Bob Woodard couldn't be reached for comment.
proposal to use the proceeds of the former sales tax was offered by
Commissioner Warren Judge as an alternative to language that was sent
by Hennessy to the board last weekend.
It was apparently being
offered because a bill that would allow the county to levy a 1/4-cent
sales to pay for dredging is stalled in the Senate after passing the
House in early April. The board had requested Cook and Rep. Paul Tine
to introduce that legislation at a special meeting on March 31.
legislative amendment provided by Hennessy last weekend states: “Sec.
3.3. Waterway Maintenance. – Notwithstanding any provision restricting
the use of taxes authorized in this act, the county shall use three
million seven hundred thousand dollars ($3,700,000) of the net proceeds
of the taxes authorized by Sections 3.1 and 3.2 of this act per fiscal
year for maintenance of waterways in the county. This section is
repealed for fiscal years beginning on or after July 1, 2021."
Sections 3.1 and 3.2 are the citations for each of the two 1-cent occupancy taxes designated for beach nourishment.
the proposal was not on the agenda nor shared with the public before
the meeting, it was discussed at the end of the meeting during county
manager’s business. Judge noted that this was the second time that
taking money out of the occupancy tax to pay for dredging had been
discussed with no public notice.
first occurred on March 2
when language was presented that would have given the county total
control of all six percent of the occupancy tax. Currently, 2 cents
funds beach nourishment, 1 cent provides revenues for the Visitors
Bureau, and 3 cents is divided among the towns and county, which use
the proceeds to help fund their respective budgets.
the Monday meeting during public comment, Willo Kelly, government
affairs director for the Outer Banks Association of Realtors told the
board that the lack of transparency about the matter was troubling. She
also requested that stakeholders should be kept in the loop on
information so that they could offer comments about any proposed
changes to legislation.
During his presentation on Monday,
County Manager Bobby Outten said that the board had turned back
suggestions for other ways to raise the funds needed to match state
funds to pay for dredging. He said that the money could be taken
from the beach nourishment fund as described in the proposed
legislative language but only for five years. And to do so would mean
borrowing more money needed to fund beach nourishment projects already
on the table.
Outten said that taking the money out of the
occupancy tax was discussed during a meeting with town mayors last week
and that the reception was “lukewarm.”
The board subsequently
voted to pursue Judge's suggestions. The 4-3 vote passed with
Commissioner Beverly Boswell strongly supporting the language provided
by Hennessy. She was joined by Commissioners Wally Overman and
“The growth of the occupancy tax in Dare County is growing at a rate of about 7% per year,” wrote Hennessy.
occupancy tax in Dare County generates more than any other county in
the state besides Mecklenburg County. Which Mecklenburg County is at
8%, and Dare County is at 6%. In 2005-06 fiscal year, the occupancy tax
generated about $14.3 million, and in 2013-14 fiscal year, the tax
generated about $21.6 million. In addition, the growth for 2013-14
fiscal year was without a full year of the tax at 6%. The occupancy tax
rate was changed by the Dare County Board of Commissioners from 5% to
6% on 1/1/2014. After looking over the numbers, it has been expressed
to us that about $3 million could be appropriated out of the 2% for
beach nourishment within the occupancy tax for Dare County waterway
maintenance, and it would not disable any of the future or previous
beach nourishment projects.
“The Senator is looking further
into this option, and we understand the importance of the occupancy tax
for the municipalities, Dare County, beach nourishment, and tourism
bureau,” he wrote.
Hennessy noted that the bill, SB 160 Enhance
Safety & Commerce for Ports/Inlets, also requires the State
of North Carolina’s Department of Environment and Natural Economic
Resources to draft a memorandum of agreement with the United States
Army Corps of Engineers on Oregon Inlet and other waterways and
includes an appropriation of $4 million to Oregon Inlet for an
intermediate dredging plan.
Click here to read Jordan Hennessy's memo to reporter Sandy Semans.