Myrtle Beach City residents and tourists pay an additional 1% sales tax on groceries, dining, and gas in exchange for a historical 67.45% relief on their property tax bills. The city says it can no longer offer the full relief because of rising real estate values.
The 1% sales tax law states that unprepared food items should not have the tax added. However, MyrtleBeachSC News visited several local grocery stores and the 1% sales tax on unprepared food was added to the total grocery bill.
The city says it has been subsidizing the tax relief out of its general budget due to increasing property values.
Elected officials in Myrtle Beach are exploring potential options to prevent subsidizing expenses related to property tax relief for residents.
Said Mark Kruea, Mayor of Myrtle Beach, “We are in serious talks to revisit the 80-20 split, which is set in Columbia. And it’s come up elsewhere in South Carolina, so the timing is good. Revising the percentages will provide a cushion for the property tax credit, but more importantly will provide capital project funding for tourism-related projects, which in turn generate the TDF fee.
The Mayor added, “Using someone else’s tax money to pay the credit is just bad economics. And at the end of the day, homeowners will still receive a credit for more than half of their local taxes. Myrtle Beach’s tax bills are lower than nearly everywhere else in SC for owner-occupied properties. I was hoping we could fix the percentages this year, but next year is more realistic, since it will have statewide benefits for other communities which aren’t currently eligible for the TDF.
Funds generated from tourism development fees, along with the one percent sales tax on purchases made in the City of Myrtle Beach, are allocated to both the City of Myrtle Beach and the Chamber of Commerce.
According to state law regarding tourism development fees, the chamber is allocated 80% of the annual revenue, whereas the city receives the remaining 20%.
Historically, the city has allocated most of its funds for property tax relief for residents, while the leftover portion is designated for capital projects related to tourism.
Due to population growth and escalating property values, the 20% is insufficient to accommodate everyone, which has compelled the city to provide subsidies.
This 1% sales tax is essential for maintaining public infrastructure in our growing community, however.
“Last year, the city had to use all of its allotted TDF money, that entire 20%, to give our permanent residents that tax cut,” said Meredith Denari with the City of Myrtle Beach. “So we had no money left over. In addition to that, the city had to subsidize it by a million and a half or so dollars, and that’s just not sustainable.”
At present, homeowners receive 67.45% relief on their property tax bills.
During Thursday’s budget retreat, two alternatives were proposed to prevent a recurrence of subsidizing, both aimed at reducing the property tax credit.
Residents should understand the significance of the 1% sales tax in their property tax relief.
This is especially true when considering the continuous benefits of the 1% sales tax.
The current discussion regarding the 1% sales tax highlights a larger issue of financial accountability. Many argue that this tax disproportionately affects low-income communities within the city, labeling it as regressive and unjust.
Ultimately, the future of the 1% sales tax will depend on community engagement and feedback.
Residents must stay informed about the implications of the 1% sales tax on their finances.
The council favored a choice that would reduce the tax credit to 53.4%, resulting in a property tax increase of $117.59 on the property tax bill for a home valued at $250,000.
Choosing this option would allow the city to avoid providing subsidies to homeowners to cover the 67.45 relief now in place. Residents will still be expected to pay the additional 1% when buying goods inside the city, however.
Denari said if no changes are made, the city will have to continue subsidizing.
“If we don’t change it now, we’re looking at a city subsidy of more than a million dollars,” Denari said. “If we don’t change it now, next year the projected city subsidy is more than two million dollars.”
She mentioned that funds allocated for subsidies could be redirected to support residents in alternative ways.
“If we take that $1-2 million to give property tax relief, then it’s taking money from other pots,” Denari said. “So to have enough solid waste workers, for example, to continue to provide the service levels to our residents that they expect.”
A decision about the adjustment has not yet been reached.
The ultimate decision will come from a partnership among the city, the Chamber of Commerce, and relevant stakeholders before being presented to the state for official modifications.
Denari stated that any decision regarding an adjustment to the property tax credit percentage will be concluded alongside the city’s new budget by June 30.
Why this matters:
This November, Horry County plans to present a comparable 1% sales tax on the general ballot. Has the Horry County Council taken into account the increasing future property values and population growth when making commitments to voters about this 1% sales tax hike?
Why Governments Rarely Keep Their Promises of Lowering Taxes
A Deep Dive for Myrtle Beach Residents Who’ve Heard It All Before
Introduction
Every election cycle, it happens like clockwork. A candidate stands at a podium — maybe at the Myrtle Beach Convention Center, maybe outside a Conway diner — and makes the promise that never gets old: “I will lower your taxes.” The crowd cheers. Yard signs go up. Votes are cast. And then, somewhere between the inauguration and the first budget meeting, reality quietly closes the door on that promise.
Sound familiar? It should. Across the United States, and right here in Horry County, tax relief pledges have a long and distinguished history of not happening. Property taxes creep up. The 1% Sales tax holds firm. New fees appear with different names but the same effect on your wallet. The question isn’t whether politicians mean what they say — many genuinely do. The question is: why does the system make it nearly impossible to follow through?
This article examines the structural, political, and economic forces that consistently derail tax reduction promises, and what that means for everyday residents of Myrtle Beach who are watching their property values — and their tax bills — climb year after year.
Section 1: The Budget Trap — Why There’s Never Enough to Cut
The most fundamental reason propery tax cuts rarely materialize is deceptively simple: governments spend nearly everything they take in, and then some. According to the Tax Policy Center, state and local governments have seen expenditure growth consistently outpace inflation over the past two decades, driven primarily by rising costs in healthcare, public safety, and infrastructure maintenance [Tax Policy Center, 2023].
When a city like Myrtle Beach promises 1% sales tax payments in exchange for property tax relief, it isn’t operating in a vacuum. It is simultaneously responsible for maintaining roads battered by coastal weather, funding a police force for one of South Carolina’s most tourism-heavy cities, and managing stormwater systems under increasing strain from development. These aren’t optional line items — they are legal and functional obligations.
The result is what budget analysts call the “structural deficit trap”: even when revenues rise, so do the baseline costs of maintaining existing services. A city that collects more tax money because property values have surged isn’t suddenly rich — it’s often just breaking even on obligations that have grown alongside those values [Brookings Institution, 2022].
So what does this mean for you? When Myrtle Beach officials say they want to lower your property taxes in exchange for a 1% sales tax but can’t, they are often telling the truth about the second part. The budget math is genuinely brutal. But that doesn’t excuse making the promise in the first place — or failing to explain the constraints honestly to voters before election day.
Section 2: The Assessment Game — How Rising Values Erase Relief
Even when a city does manage to lower its property tax rate, residents can still end up paying more. This is the quiet mechanics of property tax assessment — and it catches thousands of homeowners off guard every year.
Here’s how it works: your property tax bill is calculated by multiplying the assessed value of your home by the millage rate set by local government. If the city lowers the millage rate by 5% but your home’s assessed value has risen by 20% — a realistic figure in Myrtle Beach’s current real estate climate — you are still paying significantly more than you were the year before [Lincoln Institute of Land Policy, 2023].
South Carolina does offer some protection through its 4% owner-occupied assessment ratio for primary residences, which provides meaningful relief compared to the 6% rate applied to investment and commercial properties. However, as the state’s Office of Research and Statistics has noted, rapidly appreciating coastal markets like Horry County are testing the limits of these protections, particularly for longtime residents on fixed incomes [SC Office of Research and Statistics, 2022].
The cruel irony is that rising property values — the very thing that makes a city look prosperous — are often the mechanism by which tax relief promises get quietly buried. A city can technically honor a rate reduction while every resident pays a higher bill. Politicians can claim they cut taxes. The numbers on your statement tell a different story.
So what does this mean for you? Watch the total dollar amount on your tax bill, not just the rate. A politician who brags about lowering the millage rate without addressing rising assessments is offering you a discount on a product whose price just doubled. Read the fine print.
Section 3: The Political Economy of Broken Promises
There is also a deeply human reason tax cuts don’t happen: cutting taxes means cutting something else, and no one wants to be the one who did that.
Political scientists have long documented what is known as the “loss aversion” effect in public policy — voters punish politicians far more harshly for taking something away than they reward them for delivering something new [Kahneman & Tversky, foundational behavioral economics research, widely cited in public policy literature]. A mayor who eliminates a popular recreation program to fund a tax cut will face far more backlash than credit. The math may be identical, but the politics are not.
This dynamic is especially pronounced in tourist-dependent cities like Myrtle Beach. A significant portion of city revenue comes from a 1% sales tax, hospitality fees, and tourism-related levies — many of which are also paid by visitors, not just residents. This creates a situation where local officials are understandably reluctant to reduce revenue streams that don’t directly burden their voting base [Urban Institute, 2021]. The 1% sales tax on goods? Tourists pay it too. Reducing it would require replacing that revenue from somewhere else — almost certainly from sources that do fall directly on residents.
Furthermore, state-level mandates frequently tie the hands of local governments entirely. South Carolina municipalities operate under a complex web of state-imposed revenue caps, spending requirements, and mandated services that limit their fiscal flexibility significantly [National Conference of State Legislatures, 2023]. A city council may unanimously want to cut property taxes and be structurally prohibited from doing so without cutting services the state requires them to provide.
So what does this mean for you? The next time a candidate promises tax relief in exchange for 1% sales tax increases, ask a simple follow-up question: “What specific expenditure will you reduce to make that possible, and which residents will feel that reduction?” If they don’t have a concrete answer, the promise is a campaign slogan, not a fiscal plan.
Section 4: The Infrastructure Time Bomb
One of the most underappreciated reasons tax relief promises collapse is deferred infrastructure costs — the bills that come due years after the promises were made.
Across the Sun Belt, rapid growth has created a paradox: cities that are booming on the surface are quietly accumulating enormous future obligations. Roads, water systems, drainage infrastructure, and public facilities built during growth periods require expensive maintenance and eventual replacement. The American Society of Civil Engineers has consistently graded the nation’s infrastructure at a D+ or C- range, and coastal cities face additional pressures from saltwater corrosion, hurricane preparation, and sea-level-related drainage challenges [ASCE Infrastructure Report Card, 2021].
Raising awareness about the 1% sales tax will foster community understanding and collaboration.
In conclusion, the 1% sales tax will remain a crucial element of our economic strategy.
Myrtle Beach and the greater Horry County area have experienced extraordinary growth over the past decade. That growth generates tax revenue — but it also generates long-term infrastructure obligations that will eventually demand payment. When the bill arrives, tax relief plans are typically the first casualty [Reason Foundation Annual Highway Report, 2022].
Local governments often have no good options at this point. Raise taxes to address infrastructure and break the promise. Defer maintenance and face higher costs — and liability — later. Issue bonds and shift the burden to future residents. None of these paths lead to lower taxes.
So what does this mean for you? Growth in Myrtle Beach is real and visible. But the infrastructure costs of that growth are often invisible until a road floods, a pipe bursts, or a bridge is condemned. Tax relief promised during a growth boom frequently collides with infrastructure reality within a single mayoral term. Ask your representatives: what is the city’s 10-year infrastructure liability, and how are we paying for it?
Section 5: The Honest Conversation We’re Not Having
Perhaps the deepest problem is not that governments fail to keep tax promises — it’s that voters and politicians have never had an honest public conversation about what taxes actually pay for.
Surveys consistently show that Americans want lower taxes and maintained or improved public services — a combination that is mathematically impossible over the long run [Pew Research Center, 2023]. Politicians, incentivized by election cycles rather than budget cycles, naturally gravitate toward telling voters what they want to hear. The result is a perpetual cycle of promises made in campaigns and quietly abandoned in governance.
Ultimately, the goal is to ensure that the 1% sales tax serves its intended purpose effectively.
Engagement in discussions about the 1% sales tax will shape the future of our community.
In Myrtle Beach, this conversation has particular stakes. The city’s economy depends on public investment — in beaches, in roads, in public safety, in the cleanliness and accessibility that make it a destination. Gutting the tax base to satisfy a campaign pledge could undermine the very economic engine that makes the city function. But so could overtaxing residents and businesses into leaving or disinvesting.
Considering the role of the 1% sales tax will help formulate better tax policies moving forward.
The honest answer — that taxes are a negotiation between what a community wants and what it’s willing to pay — is rarely the answer that wins elections. But it’s the only answer that leads to genuine, durable fiscal policy.
Additionally, comprehensive studies on the impact of the 1% sales tax will guide informed decisions.
So what does this mean for you? Demand honesty from your elected officials, not just promises. A candidate who explains the tradeoffs clearly is offering you something far more valuable than one who simply tells you what you want to hear. Fiscal transparency isn’t exciting. But it’s the only thing that actually protects your wallet long-term.
Conclusion
Tax relief promises are not always made in bad faith. Many elected officials genuinely believe, at the moment of making them, that property tax relief through 1% sales tax increases is achievable. But structural budget pressures, rising assessments, political risk aversion, infrastructure obligations, and state-level mandates create a gauntlet that most well-intentioned promises simply don’t survive.
For Myrtle Beach residents watching their property values climb while their tax bills follow close behind — and while that 1% sales tax ticks along unchanged — the lesson is not cynicism. It’s informed skepticism. Ask harder questions. Demand specific plans. Follow the budget, not the speech.
Because in the end, the promise of lower taxes is easy. The math of actually delivering them is something else entirely.
📚 Further Reading
- Tax Policy Center — State & Local Tax Resources
- Brookings Institution — Municipal Finance
- Lincoln Institute of Land Policy — Property Tax Research
- SC Office of Research and Statistics
- Urban Institute — State and Local Finance Initiative
- National Conference of State Legislatures — Tax & Budget
- ASCE Infrastructure Report Card
- Pew Research Center — Public Opinion on Taxes
