County Paves Way For Room Tax Hike

SNOW HILL – The way is now clear for a half percent hike in the Worcester County room tax after the County Commissioners passed enabling legislation this week raising the tax’s upper limit.

The legislation raising and putting into effect the actual tax on hotel room and condominium rentals will be considered on Nov. 6, at 10:30 a.m., at the County Commission meeting in Snow Hill. A public hearing will be held before the vote.

A public hearing, featuring several tax hike supporters and one lone dissenter, also preceded the vote on the enabling legislation this week.

Although Ocean City asked for the increase in the rate to add funding to its advertising budget, both the Snow Hill and Pocomoke mayors endorsed the increase at the hearing.

 “We do have our share of hotel-motel operations and it would certainly not be a detriment to us and it would help us increase out advertising as well,” said Pocomoke Mayor Michael McDermott, who estimated the town would receive an additional $10,000 in increased tax revenue if the increase is approved in November. “I wish it were more, frankly. Four and a half percent is incredibly low for resort areas. I urge you to unanimously approve the tax increase. We do not oppose it one iota.”

Snow Hill Mayor Steve Matthews agreed, saying, “We totally endorse the bill. I hope you’ll pass it.”

Ocean City feels it needs more advertising funding to compete with other beach towns, from the mid-Atlantic to the Caribbean.

“This was brought to us by the hospitality industry,” said Ocean City Mayor Rick Meehan. “Our advertising budget has remained pretty much the same for the past five or six years.”

Ocean City projects that the advertising budget would increase from $1.7 million to over $3 million the first, and within the next few years reach $5 million, similar to what other local resorts are spending to market themselves.

“This is the right direction for us to go in,” said Meehan. “I think it’s a great move.”

Ocean City Hotel-Motel-Restaurant Association first brought the proposal to the town after the membership met and voted to support the proposal currently on the table.

“Our board of directors has worked extremely hard to build consensus among our members,” said Susan Jones, OCHMRA executive director.

The half percent increase, smaller than some members wanted, and higher than others desired, was a good compromise, Jones said.

The raised room tax would not benefit just the resort, she added, saying the destination marketing concept will include a regional approach.

“We are going to make this an entire region effort,” said Jones.

Ocean City resident Ellie Diegelmann, who unsuccessfully ran for County Commissioner last year, was not so sure the increase would be a good idea. The notion looks good on the surface, she said, but Ocean City suffers from more than a low advertising budget.

Diegelmann cited visitor complaints such as the high costs of visiting Ocean City versus the low quality of the product or experience, the unwelcoming workers, and smelly public bathrooms. The tourism summit held this week in Ocean City is “still in denial” over the tourist complaints, said Diegelmann.

The tourism summit also seemed under-attended, she said. Over 100 business owners, tourism workers and town officials attended the summit.

Employees in tourist-related businesses need to be better trained and customer service and communications improved, said Diegelmann.

“If good things by their own admission aren’t quite good enough, maybe we need to rectify the bad things,” Diegelmann said,

How would an increase in the room tax make service decline, Commissioner Louise Gulyas wondered.

Visitors feel that the prices in Ocean City are high for the value they are getting, said Diegelmann.

“If you’re not getting results with prices you have, why would you raise the prices?” Diegelmann asked. “If something’s already not selling, why would you raise the price?”

Gulyas responded, “The whole idea of the increase is to increase the tourism dollar. The problems you’re talking about are within the industry.”

Gulyas acknowledged that there is value to having those problems known and thanked Diegelmann for her testimony.

“I don’t think I’m quite finished yet,” said Diegelmann.

The town’s advertising firm’s assertion that the current marketing campaign is effective is contrary to the notion that the advertising budget is too low, Diegelmann said.

The town needs to look at gross profit margins to really see how many tourist dollars are coming into Ocean City, she said.

Diegelmann also disagreed with McDermott over the benefit of the tax increase to his municipality.

“I thought it would probably more adversely effect Pocomoke’s recent tourist efforts,” Diegelmann said.

The County Commissioners, with Commissioner Bud Church absent, passed the emergency legislation unanimously.

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