New Darlington hospitality tax upsets restaurant owners

By Patricia Burkett and Jim Faile
Published: November 12, 2008

DARLINGTON — Darlington City Council’s recent approval of a 2-percent hospitality tax has upset some of the city’s restaurant owners.

Prepared foods and beverages served at restaurants, delis, bars and other establishments in the city will be subject to the tax, which was approved during a Nov. 4 council meeting.

City officials said they they hope to generate about $350,000 a year for use on various city projects, including renovations to the city swimming pool and the completion of a walkway in a downtown building.

But city restaurant owners like Joey Saleeby, who was one who spoke out against the tax at the Nov. 4 meeting, say the tax will have a negative impact on their business.

Saleeby’s family has owned Joe’s Grill in Darlington for more than 56 years. In that time, Saleeby said, his family has served generations of people and built a special reputation in the community.

“We’ve always been like a little mom-and-pops place. It’s just like home, and if you don’t get good service here, it’s your own fault,” Saleeby said.

Through the years, Saleeby said, he and his family have seen the impact of a tough economy and have done what they could to help their customers.

“I’ve got people that come in to this day and talk about, you know, how they’d come in here back in the ‘50s and wouldn’t have a dime to their name,” he said. “My dad would feed them, they’d come back later and pay him.”

Saleeby said he understands times have changed since then, and so has the economy.

He said it’s hard enough getting customers in the door nowadays, but it may be even harder thanks to the hospitality tax.

“I have people that eat with me every day that are on a fixed income,” he said. “You know I’ve got to raise my prices, everybody else has to raise their prices to cover this additional tax.”

Saleeby and other city restaurant owners fought the tax, but were unsuccessful. Now, he said, an effort to draw more money for the city may end up costing him and other small business owners who are just trying to stay afloat.

The motion to approve the hospitality tax ordinance passed 6-0, City Manager Rodney Langley said. Councilwoman Gloria Hines wasn’t present for the vote.

Langley said the new tax could take effect as early as January.

Darlington Mayor Tony Watkins, who runs Pearl Street Furniture in downtown Darlington, said the idea of a hospitality tax in the city first arose about four years ago, but he felt adopting the tax then was premature because there were no city projects in need of major funding sources.

When the financial crunch began to hit the city’s budget, accompanied by major cuts in funding at the state level, the pressure on the city grew, he said.

“Obviously, funding sources have dried up,” Watkins said in an interview last week. “We have the needs. Nobody likes to raise taxes. But when these needs became critical, the idea came up again of a hospitality tax.

“This is not something that we arbitrarily chose to do,” he said. “These projects were already in the pipeline, and when we saw revenue sources that we thought were going to be there, and all of a sudden they weren’t, we felt we had to do something.

Watkins noted that out-of-town travelers — “beach traffic” —who stop to eat at any of the restaurants along the U.S. 52 Bypass will be paying the tax, adding to the city’s revenue.

Several other surrounding municipalities already have a hospitality tax in place, including Hartsville and Florence. Hartsville is using the revenue from its tax to finance improvements to parks and recreational facilities throughout the city through a $5 million bond.