Proposed legislation outlines deal for Mount Olive for county hotel tax
By Steve Herring
Published in News on July 29, 2015 1:46 PM
An apparent compromise has been reached between Wayne County and Mount Olive on a proposed 1 percent countywide hotel occupancy tax.
It would require that 70 percent of the hotel tax revenue generated in Mount Olive be used to promote travel and tourism there.
Wayne County Manager George Wood confirmed that a compromise had been reached, but said he could not comment further until the wording in the agreement is made final.
"We are in the process of getting it drafted to the satisfaction of them and us," he said.
The proposal is expected to be discussed by the Mount Olive Town Board when it meets on Monday and by county commissioners the next day.
Goldsboro City Manager Scott Stevens said he had been aware of negotiations between the county and Mount Olive, but he had not been involved.
The negotiations started after Stephanie Kornegay and her brother, Kevin, owners of the Mount Olive Sleep Inn, complained that the tax proposal was unfair.
The Kornegays wrote in a letter to the editor that Goldsboro has "every right" to build a convention center and that the public knows the Cooperative Extension Service needs new office space.
"Where we disagree is levying a hotel occupancy tax on the people in Mount Olive and the businesses that do business in Mount Olive to pay for it," they wrote.
Actually, none of the tax revenue could be used for building the center. The revenue can only be used for marketing related to travel and tourism.
There have been no public meetings about the tax, but there has been a steady stream of Facebook postings encouraging Mount Olive residents to pressure state Sen. Louis Pate, who lives in Mount Olive, to support an amendment to the tax bill.
Pate said he supports the local bill, but not any amendments, particularly one guaranteeing how the tax revenue would be split.
"Now there is some discussion about making an amendment that guarantees how the county and city are going to divide up this money," Pate said in an earlier interview. "I don't see that that is necessary for the General Assembly to make that sort of guarantee. I think that is really between the county and the city as far as I am concerned ... I don't think we need to get involved in Wayne County like that."
The wording on the amendment indicates it was drafted through the office of Sen. Don Davis, who represents a portion of Wayne County.
Davis could not be reached for comment prior to press time today.
Stevens said he did not understand why such a binding agreement on how the money would be divided needed to be part of a state law.
Goldsboro's agreement with the county for construction of the city's sport complex and the county's agriculture center is predicated on the 1-percent tax increase, he said.
Yet, it is a local binding agreement and not part of a state law, Stevens said.
"The passage of the 1 percent is important for continued marketing of our community," Stevens said.
Along with the tax, the bill would create the Wayne County Tourism Development Authority.
The amendment would require the authority to separate the net proceeds of the tax revenues generated in Mount Olive into two separate accounts -- one for Mount Olive and one for Wayne County.
Seventy percent of the total amount collected in the town would go to the Mount Olive account and 30 percent into the county account.
The authority would use 100 percent of the money in both accounts to promote travel and tourism in the collection area each account represents.
"When we met in Raleigh, the legal aide that specializes in this kind of tax briefed us on different ways other counties have done this," Ms. Kornegay said. "This is not unusual. Sens. Davis and Pate were both there. So when they both, Sen. Pate and Davis, asked us to go home and reach an agreement that the whole group could live with, we did.
"After the agreement was reached, we asked the legal aide to let us know how an amendment to represent this agreement would look. We have a draft."
She said the amendment should not derail the tax.
"It is an agreement that we are all happy about and can live with over the next 40 plus years that it will be levied."
The agreement must be enforced for 40 plus years or else it can technically be changed whenever there is a board member change, she said.
Ms. Kornegay said the effort was not politically motivated.
"We have been working with all that will -- nonpartisan with city and town officials, Republicans and Democrats in both chambers, and the county commission. We are hoping to reach a solution good for everyone."
The bill passed the House where it was introduced by state Rep. John Bell. It has passed its first reading in the Senate and was referred to the State and Local Government Committee.
Without the additional tax, the contract between the city and county for the sports complex and agricultural and convention center is void and neither facility would be built, Wood said.
The new tax revenue can only be used for marketing travel and tourism in the county and not for construction.
The money for the agriculture and convention center is a separate issue to be worked out between Goldsboro and county from revenues from the city's existing 5 percent occupancy tax.
The original bill would have increased Goldsboro's hotel occupancy tax from 5 to 6 percent as part of the deal to provide city funding for the agriculture/convention center.
It was switched to a countywide tax after the proposal ran into opposition from state travel and tourism officials.
Getting the total up to 6 percent was done to allow the revenue to be divided into thirds.
The county could use its portion for the agricultural and convention center.
Under the terms of the agreement, the city would give the county 12 acres of land on North Wayne Memorial Drive on which to build the center. In exchange for the county increasing the size of the assembly area, the city agreed to ask for the occupancy tax increase and to provide 33 percent of the additional revenues for the first 20 years for the center and 25 percent thereafter.
In return, the county would loan Goldsboro $3 million at 1.5 percent interest over 15 years for the sports complex.