Accommodations Tax Discussion Heated, Redistricting and DelDOT Projects Also Discussed by Sussex County Council
The Sussex County Council had several big topics this week – but a discussion on the Accommodations Tax became heated with the council split on the issue.
Councilman Mark Schaeffer asked that the topic be placed on the agenda. He claims that the accommodations tax was reinstated without a vote by the council. He planned to ask for the tax to be rescinded, however as Council President Mike Vincent polled the Council members – only Schaeffer and Cindy Green supported an ordinance to rescind the tax.
Council Vice President John Rieley, Vincent and Councilman Doug Hudson support the tax, which is only for businesses in rural Sussex County – and not a tax on County residents but visitors – to support the maintenance and upkeep of county amenities and infrastructure used by visitors (beach replenishment, dredging, economic development, tourism programs, recreational activities, water-quality projects and flood-control projects).
Rieley explained that the accommodations tax was suspended in 2019 because hotels were having trouble with the pandemic slowing tourism. Last summer was a good one according to Southern Delaware Tourism – with hotels returning to pre-pandemic occupancy. As Rieley began to speak, Schaeffer left the council dais. Rieley went on to say that Schaeffer, after nearly a year on the County Council, he shows a lack of understanding on how the county budget operates or how to make a proper motion. It was also hinted at that council members discussed this issue ‘in the dark of night’ rather than in open discussion and that Schaeffer opted to take his issue to the media – rather than discussion with the council.
Part of the issue stems from a possible misunderstanding in phrasing last May when the tax was removed from the agenda as the council had planned to discuss possibly reinstating the accommodations tax before the Governor’s State of Emergency was lifted. Schaeffer says his motion was to defer the tax, not a vote.
County Attorney Everett Moore read from Council minutes to clarify comments and explain the Council’s actions in relation to the accommodations tax.
Time line of the Accommodations Tax:
Original ordinance – approved 11/12/19 – (effective 1/1/20)
On 4/7/20 – the county suspended collection of tax – not a suspension of the ordinance under umbrella of Governor’s State of Emergency.
It was reaffirmed 4/27/20
Moore looked at several issues – did it refer specifically to the State of Emergency Declaration? It did “until such time as the declaration is lifted.”
He said the 5/25/21 agenda item in the Administrator’s Report was for discussion & possible action related to the collection of Accommodations Tax. Moore said there were not changes in the agenda that day, but during the approval of the agenda, Schaeffer asked that that specific item be removed. He didn’t think timing right to discuss a tax increase – the item stayed on agenda. County Administrator Todd Lawson said collection of the tax was suspended because of Covid-19 – however the Council could reinstate the tax early before the State of Emergency was lifted. Vote on that was deferred. It was not a vote to abolish or rescind the tax. The motion to defer only stopped discussion on early lifting of suspension of collection of tax.
During the public comment portion of the Council meeting, Christian Hudson told the council that his business was hit hard by the pandemic and spoke against the reinstatement of the accommodations tax. He finished saying, “It sure sounds like taxation with out representation to me.”
The accommodations or lodging tax was enacted in July of 2019 when Governor John Carney signed HB 228 into law. “This Act allows Sussex County, by duly enacted ordinance, to impose a local lodging tax of no more than 3 percent of rent on rooms in a hotel, motel or tourist home located in the unincorporated areas of the County.” It was effective on January 1, 2020. A lodging tax was already being charged in municipalities – and many of those businesses felt it unfair that businesses in unincorporated areas of Sussex County were not charging a lodging tax to visitors.
In other action – Sussex County is preparing to redraw the Councilmanic districts – just as the State has redrawn the House and Senate districts. County Attorney Everett Moore says the process will be the same as 10 years ago and that comments and proposed maps will be accepted through 4:30pm, December 1, 2021. Sussex County’s population has grown over the past 10 years by 40,233 people – to its current 237,378 residents. You can submit your ideas by email: email@example.com or by regular mail to: Clerk of the Sussex County Council, PO Box 589, Georgetown, DE 19947. Click here for more on redistricting.
DelDOT officials visited the Sussex County Council this week to update the Council on a variety of projects. They said that statewide – traffic fatalities are higher than last year in all categories – vehicle, pedestrian and motorcycle.
Secretary Nicole Majeski told the Council that the launch of DART Connect, the on-demand bus service has provided over 8000 trips since its April debut and the beach bus this summer saw over 150,000 trips taken.
Deputy Secretary & Chief Engineer Shante Hastings told the Council that the FAST Track (Funding Accelerating Safety & Transportation) project – the triangle intersection of Cave Neck/Hudson/Sweet Briar Road is moving along. Without FAST Track, design would not have begun until FY 2025 – now because the funding was fast tracked by the County, project design is already underway – and will go to construction in FY 2025. Several concept options have been drawn – two with dual roundabouts, one with a single roundabout and one with no roundabouts. There will be a virtual public workshop on November 16 3:30 to 5:30pm.
Hastings also discussed multiple other projects including the Georgetown East Gateway which should be mostly completed by the end of this year – pending weather. Also the Park Avenue Relocation – most of which will not be done on existing roadways, except for the roundabout at Arrow Safety Road and South Bedford Street where the new Park Avenue will come out. She also discussed multiple Route 24 projects between Route 1 and Millsboro and multiple Route 1 and 113 corridor projects which are either planned or in the project development phase. DelDOT is spending $1.3-billion on Sussex County road projects.
County Administrator Todd Lawson acknowledged the death of former County Attorney Eugene Bayard, who died on October 30 as well as the recent death of Governor Ruth Ann Minner.
The Council also held a public hearing on the approval of the issuing of tax-exempt revenue bonds by Bayhealth Medical Center. The $103 million in tax-exempt debt will be used with other financing to expand their services in both Sussex and Kent counties. There is no obligation of the County for these bonds, however the issuance of the bonds needs to be approved by an elected representative after a public hearing. Approving the issuance only allows the bonds to be considered tax exempt under section 147(f) of the Internal Revenue Code. There was no comment during the public hearing and the Council approved the resolution by a 5 to 0 vote.