Scanlon: Plan in case room-tax revenue dips
By William F. West
Friday, November 24, 2017
CURRITUCK — For 20 years, rising revenue from Currituck’s tax on hotel and cottage stays has helped the county pay for a host of expenses.
But what would happen if that revenue not only slowed down but also began to decrease?
It’s a subject County Manager Dan Scanlon broached during a recent work session of “Imagine Currituck,” the ongoing effort to craft an updated land-use plan for Currituck to help plan for growth through 2040.
Scanlon said he had spoken with county tourism and travel officials about what he called "this 20-year run" the county has been on with occupancy tax revenues. The tax on hotel and cottage stays generates millions of dollars annually for Currituck, much of which has to be spent on tourism-related expenses on the Outer Banks.
"Life is easy if that continues, but we better have a plan" for if it doesn’t, Scanlon said.
Scanlon said he believes occupancy tax revenues in fact will flatten — and more than likely decrease — because the Corolla area is already nearly built out with new residences and doesn’t have new future housing stock coming.
He also said as some of the housing stock on the Outer Banks goes from rental to year-round residency, there’s the potential to see less and less revenue.
"So, we need to have a parallel budgeting or a long-term view of, 'How do we continue to provide services with an occupational tax that's $1 million less than it is today, versus assuming that it's going to be $1 million more?'" he said.
Board of Commissioners Chairman Bobby Hanig said the possibility revenues from the occupancy tax may decline is why the county needs to encourage more development on the Currituck mainland.
Hanig said he’s especially concerned that occupancy tax revenues could decrease after the Mid-Currituck Bridge is completed and opens to traffic.
The bridge also came in for some discussion during the Nov. 2 work session.
County Commissioner Bob White said he believes the bridge linking the Currituck mainland and Outer Banks will “change Corolla forever.” He, too, believes there will be a shift from seasonal renters to more year-round residents in both Corolla once the bridge is built.
"We'll see a shift of who's living in Corolla," he said.
Elizabeth White, a member of the local steering committee helping craft the update to the county’s more-than-decade-old land-use study, also had a suggestion about how Currituck should best plan for the future of its Outer Banks region.
White said a key question concerns how to best capture value on the Currituck Outer Banks while paying the least amount for services. One option is to encourage nature-based high-end tourism, she said. The other option is to impose limits on the number of large homes being built on the Outer Banks.
"You can make it into Corolla II or you can make it into New Jersey Shores — or you can protect it and make it into something totally different,” she said.
White suggested the county consider acquiring properties from landowners in the off-road area for fair market value and putting them into conservation easements or setting them aside for stormwater retention areas.
Under the terms of a conservation easement, a landowner can voluntarily agree to sell or donate specific property rights, including the right to subdivide or develop, to a private organization or a public agency.
White said surveys show the majority of people who live in the off-road area say "that's how they'd like to see that area developed."
She also believes property tax values on the Outer Banks, irrespective of occupancy tax revenues, will be “astronomically more” in the future if the county can find a way to start a conservation easement program.