Currituck, N.C.
Tax collections on rentals of beach houses and other lodging in Currituck County are expected to reach a record $9 million next year.
But state law mandates that a third of that must be used to attract more tourists, and county officials are struggling with how to spend it all.
A new budget that begins July 1 calls for $2.3 million for promoting the county, leaving an extra $700,000 that will be added to a reserve fund that has grown to $3.7 million.
None of it can be spent on projects such as schools or public water and sewer systems.
"A lot of that money is going to sheer waste," County Commissioner Gene Gregory said at a budget workshop Monday.
The remaining $6 million in revenue must be spent on tourism-related projects, which gives commissioners more flexibility. That fund can include parks, beach nourishment or deputies on the Outer Banks.
In 2005, state law allowed the county to charge 6 percent on rentals, called occupancy taxes. At the same time, the state mandated a complicated formula that sets aside about one-third of the taxes for advertising. The law used to allow the county to use 25 percent for the general fund.
County commissioners want the law changed back to the way it was. Lawmakers have declined so far. The issue is the growing advertising fund.
"We have no issue with marketing, but at some point you feel like you're going to get diminishing returns," County Manager Dan Scanlon said in an interview Wednesday.
Commissioners plan to use about $40,000 to promote economic development in the county. On Monday, three marketing companies made presentations vying for the job to promote Currituck County as a business location.
Officials also have considered cutting occupancy taxes to 4 percent from 6 percent.
Commissioners and tourism proponents have debated the value of advertising. Ads in national magazines such as O, The Oprah Magazine, have attracted more tourists to the Currituck Outer Banks in a competitive market,
Diane Sawyer, director of the Currituck County travel and tourism department, said Thursday. More tourists generate more occupancy tax revenue and more sales tax revenue, which can be used in the general fund.
Ads in O have generated 17,000 leads since July 1, Sawyer said.
"The promotional efforts are paying off," she said.
Jeff Hampton, (252) 338-0159, jeff.hampton@pilotonline.com
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