Lexington Intersection Projects and Hospitality Tax

The Lexington Town Council is proposing a 2% “hospitality” tax to fund three road intersection projects.  The three locations are downtown, Lake Drive and Sunset/Columbia Avenue and Corley Mills and Sunset.

The tax would be imposed on any prepared food item for immediate consumption.  Restaurants, fast food, carryout and cooked items in a grocery store.  If you go into Food Lion and buy groceries, those items will not be subject to the extra 2%, but if you buy fried chicken from the deli, it would be.  Popcorn at the movies is another example of a taxed item, but boxed candy is not.

As example, a $50 dinner for two would add $1 to the meal.  A fast food lunch of $6 would mean an additional 12 cents.

It must be pointed out that this tax is already in place in Richland County and other municipalities in Lexington County. If you buy relevant food items in Harbison, you’ve been paying that tax for a while.

No one likes to pay taxes, but it’s the cost of being a society in which services and infrastructure are required and shared.  In discussing taxes, it is only fair to note that Lexington property taxes have not risen in 29 years (Ronald Reagan was President) while the millage has been reduced four times.

The Town Council is hosting four meetings to discuss the projects’ funding and hear resident questions.

Monday, August 10 – 6:00pm
Public Education Session
Lexington Municipal Complex
Conference Center

Monday, August 17 – 6:30pm
Regular Council Meeting
Council Chambers
1st Reading

Monday, August 24 – 6:00pm
Public Education Session
Lexington Municipal Complex
Conference Center

Tuesday, September 8 – 6:30pm
Regular Council Meeting
Council Chambers
Final Reading and Public Hearing

Lake and Main has spoken with council members and developed a series of questions and answers to help town residents understand the plan, the tax and the reasoning behind the approach taken.  Additional information can be found here.

Why are we doing this?

The amount of traffic through the Town of Lexington has increased dramatically in the last few years and it is expected to grow even more.  These intersections are major bottlenecks and are the ones most in need of improvement, not just for traffic flow, but for traffic safety as well.

An estimated 120,000 to 130,000 vehicles travel through the Town of Lexington every day.  This includes not just town residents, but people going through the town to get to home and work or those who work within Lexington but live elsewhere.  There are also thousands of vehicles carrying people (and commercial vehicles) from within Lexington County and other counties enroute to Lake Murray and Harbison.  Since the town has a population of only about 20,000, it would be unfair for the town residents to pay for roads that are used by six times as many vehicles.  By instituting a tax on prepared foods, those who use our roads but don’t live here (and are the reason for the traffic influx), will be contributing to roadway improvements.

We also have to consider that these numbers are growing and will continue to grow as the town and county expand in population, tourism and people “passing through” to get to work and recreational venues.  The Lexington Farmer’s Market, Wine Walk and Snowball Festival have been huge successes and bring around 12,000 annually downtown. The number of people these and other events attract not only help brand our town as a destination, but they also put a burden on a particularly vulnerable area. The pending “Ice House” project, destination retail center and public green space which will include boutique retail, eateries along with plans to construct an amphitheater, will further exacerbate vehicle and foot traffic downtown.  The intersection improvements planned with alleviate much of the congestion and make access to these and other events as well access to businesses and government facilities easier and safer for vehicles and pedestrians.

Don’t my gas taxes already pay for roads?

3786The State General Assembly has not provided a long term fix to the road funding problem.   Additionally, SCDOT funding is insufficient to address traffic growth, leaving the Town of Lexington without a solution to our traffic problems. So, we have very few options when it comes to getting the funds needed.  Without county, state or federal money available to do any of the work needed within town limits, the Town of Lexington must come up with the resources alone.  Some of the roads within the town must be addressed very carefully since they really don’t “belong” to us.  For instance, Highway 1 is actually a federal road and comes with restrictions and standards that we cannot change.

If you are levying a tax, why can’t that money go for any road improvements?

By law, funds derived from a hospitality tax must be spent on roads leading to/from recreational areas.  These intersections, in addition to being major points of congestion, fit that criteria.  This is also the reason why other intersections, Mineral Springs Rd/Sunset Blvd., for instance, cannot be included for improvement.

Why doesn’t the school district pay for the Corley Mill improvements?

The current plan for the Corley Mill improvements is expected to include funding assistance from the school district.

Didn’t we vote not to have this tax once before?

Yes. Since 2005, tourism has increased, traffic has increased, population has increased and we now have a very clear plan to address the needs by specifically targeting our traffic issues.  The law has also been clarified to allow the funding to be used for the current planned projects, which can be the catalyst to further drive tourism into the town.

How can we be sure you don’t pocket the money for “pet projects” and that you truly invest the funds in implementing these programs?

This is being enacted by your town council who is accountable to the people.  We have proven our transparency and credibility most recently through the Vision Plan Projects.  Council will specifically identify the projects and make sure the funding is transparent through audits.

Why not other places?  These are not the only problem areas.

True, but these are the most problematic and the only ones we can fund.  Improvements will be made at a few other locations, but those will be as a result or part of these three primary sections.  For instance, the intersection at E. Main and Harmon (opposite Old Mill) will be improved as part of the feed to the Dreher Road/Azalea Drive re-direct for the roundabout at Lake Drive and Sunset Blvd.

So there is no alternative but the hospitality tax?

Actually, no. No fairly, anyway.  We could increase the town property tax, but to do so would put the entire burden of funding on the backs of town residents.  In doing so, the amount a town resident would eventually pay would be far more than they would via a 2% tax on prepared foods.

How long will this tax be in place?

That has not been determined, but, given the restrictions on acceptable expenditures, it could very well end when these projects are completed.  That is not certain, however.  With the defeat of the county penny sales tax last year, funding for necessary infrastructure maintenance and upgrades is very scarce while the demands continue to rise.  The honest answer is that we want to make Lexington a competitive alternative to other areas and maintain a tax beyond its usefulness would be counter-productive.  Right now, this tax is intended specifically for these projects and only these projects.


Information about and links for members of the Town Council can be found here.

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