OC Citizens Group Looks To Rally For Tax Differential

OCEAN CITY – The Citizens For Ocean City group is looking to have its voice heard before the Worcester County Commission in a show of support for Ocean City’s tax differential request.
Citizens For Ocean City spokesman Joe Groves returned to the podium this week at the conclusion of the Mayor and Council’s legislative session on Tuesday evening to announce the group will be reaching out to Worcester County Commissioners in support of Ocean City receiving a tax differential from the county. Ocean City has long sought a tax differential from the county for duplicate services provided, but the request has never been approved, dating back to the mid-1990s.
“While some of our County Commissioners may not like the idea, we believe our town deserves more from our county. We have the largest tax base,” Groves said. “Our group is going to start to reach out to our County Commissioners and attend their meetings to see if we can do something for the town or at least persuade the commissioners even if they were a little more polite to us this year.”
In the beginning of July, the Mayor and City County granted approval to submit a Legislative Action Request that would move the town forward in possibly receiving relief from Worcester County through a tax differential that comes to about $17 million.
At that time, Ocean City Manager David Recor explained a Tax Differential Study was conducted by The Municipal & Financial Service Group (MFSG) to come up with the potential impact a tax differential would have on the Ocean City taxpayers.
According to the study, on an annual basis the Town of Ocean City meets with the Worcester County Commissioners for the purpose of requesting a tax differential of county real estate taxes. Ocean City has based its requests for a tax differential on the rationale that certain county services and programs were neither available nor provided to Ocean City residents by the county because Ocean City provided those same or comparable services and programs to its residents. Fire/EMS service to the unincorporated area of West Ocean City is the example most officials cite. Two other examples would be public works and recreation and parks as the city has their own departments.
Ocean City’s requests are supported by several studies prepared by the Institute for Governmental Services (IGS) that found duplicated services. Worcester County has been reluctant to grant the city’s requested tax differential and has instead responded with a variety of grants.
However, these grants only offset a small fraction of what the tax differential should be, based on the fact that Ocean City constitutes almost 60 percent of the assessable real property tax base in Worcester County yet receives a disproportionately small share of county services and programs.
The study explains, using Worcester County’s adopted Fiscal Year (FY) 2013 budget as a starting point, MFSG categorized county services into two classes. First are those programs and services that are available and provided to Ocean City residents, and second are those services and programs that are not available or provided to Ocean City residents.
MFSG identified the costs related to each program and service. MFSG documented any programs or services that were partially available or provided to Ocean City residents and documented the basis for allocating the budgeted expenses related.
MFSG identified several county services or programs that are not offered to, provided to and/or utilized by the town and its residents, such as the Worcester County Tourism, Public Works, Recreation, Emergency Services, Fire Marshal’s Office, Development Review and Permitting, the Sheriff’s Office and Environmental Programs.
Based on the assessed valuation of real property tax in Ocean City and in the remainder of Worcester County, MFSG calculated the “real” property tax rate for the entire county and a supplemental tax rate for those portions of Worcester County exclusive of Ocean City.
MFSG’s analysis indicates that for FY 2013, Worcester County will need to collect $119,678,288 in property tax revenue. MFSG analysis indicates that $102,531,947 of the property tax collected should be paid by all county residents including those in Ocean City, but that $17,146,341 in property taxes should not be paid by Ocean City tax payers.
That $17,146,341 is therefore the expense amount that calculates the tax differential of $0.269, which adjusts the $0.770 countywide property tax rate to $0.687 for Ocean City and $0.956 for the remainder of Worcester County.

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