OC Tax Rate Comes With Consequences

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Unanimously,
the Ocean City Mayor and Council approved a 50-percent increase in the per-day
bus fare, starting next January. This was one of many decisions that allowed
officials to retain the same property tax rate as last year.

It was a huge deal the
last time Ocean City raised its all-day bus fare, and this week’s decision
should result in a similar backlash, although it may be tempered by the fact
the increase does not take effect until January.
While we were among the few back in 2002 in support of the doubling of the bus
fare from a buck to $2, believing it was still a value, the City Council was
wrong to vote for another increase in the same year it trashed its curbside
recycling program to cut expenses, reduced a variety of services and increased
fees for others, raised business license fees, cut down on the number of
streets lights illuminated and raised Inlet parking lot fees.

Unlike most, we think
the city was right to increase the Inlet parking rates because seasonal trends
showed motorists found the lot to be a major bargain, setting up camp from dawn
to dusk in many instances.

With the recycling
program decision, it’s no secret this was all about the money, specifically $1
million the town will save. This move has brought the resort tremendous
negative publicity, but we feel the decision has merit in that it actually
increases the amount of products recycled and it’s more efficient from a fiscal
standpoint.

However, with this
week’s vote to increase the bus fare added to all the other recent moves,
property owners could see mixed results. While they may like what they see when
their tax bills come due, they will, unquestionably, notice that it comes with
serious consequences. We are concerned the city has given up too much too fast
in the realm of services and that the impact will be widespread.

What’s happening
currently in Ocean City was inevitable, but it’s still painful. The only
comfort is misery loves company because nearly all governments are facing the
same quandary – drastic decreases in property taxes fueled by depressed land
values contrasted with tremendous spikes in expenditures on necessary expenses
like health insurance, utilities, fuel, union salaries and benefits and
unemployment costs.

What this has resulted
in is a frantic attempt to cut spending and increase revenue, keeping property
taxes at levels either the same or below current rates.
Elected officials should be conservative stewards of the public’s purse
strings. They should examine all expenses and cut where they can. This council
has shown the willingness to do just that, and that’s commendable. The problem
is this is a new phenomenon in Ocean City. Just within the last two years have
expenses been scrutinized to the necessary levels. For years, spending was out
of control. By coining this “rightsizing” phrase and movement, officials
confirm something was awry for a long time.

It’s a certainty that
the decision to increase the bus fee will result in fewer people riding the
bus. Ridership trends are discouraging as it is, as the city recorded a 140,000
decline in riders in 2009.

Back in June of 2002,
when the all-day fare was bumped to $2, ridership predictably plummeted. In the
first month after the increase was instituted, a 13-percent ridership dip was
reported when July of 2002 was compared to July of 2001, followed by similar
numbers the rest of the year.

The
city can expect similar declines with this increase, meaning it has abandoned
its long-time philosophical approach of encouraging mass transit use rather
than vehicle dependence. Revenue will go up even with serious declines in
ridership, but there’s more at play here.

Yes,
this decision may bring in some more money, but this is yet another idealistic
shift that undermines the city’s image. This move, coupled with the
controversial recycling decision, will please some taxpayers obsessed with
savings but those with some foresight will also realize it comes with some
unfortunate ramifications as well.

 

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