There’s a tremendous amount of money at stake in the ongoing tax differential discourse between the Town of Ocean City and Worcester County, and every single property owner in Worcester County could be impacted by the resolution to this situation.
Worcester County and Ocean City governments must work this out fairly because approximately $17 million in duplicated services has been quantified. Going to court over this matter would be an unnecessary waste of valuable resources, most notably time and money.
For the first time in the decades-long discussion, there appears to be a common ground. Two separate studies — one commissioned by the county and another by the city — have concluded Ocean City property owners are indeed funding an unnecessary duplication of services. Both studies recommend Worcester County increase its property tax for non-Ocean City property owners while lowering the resort property owners’ rate.
Ocean City’s importance in Worcester County’s economy cannot be understated. While health care, education and agriculture are considerable factors in Worcester County, there’s no question tourism is the economic driver.
What would Worcester County be like without Ocean City? It’s clear it would be an entirely different place from a government, financial and education perspective. Its impact on the latter was weighed last week.
Ocean City is the cash cow for Worcester County. No revelation there, but some light was shed on just how it is depended on from a revenue perspective. Perhaps most dependent is education.
Three hundred public school students of the more than 6,500 enrolled this school year live in Ocean City. Despite the paltry percentage, Ocean City revenues are used to bankroll the school system. Ocean City funds approximately 60 percent of the county’s budget, 44 percent of which was used in 2015 to fund public school education.
It was a good sign last week that County Administrator Harold Higgins was in attendance at the Ocean City Mayor and Council meeting when tax differential was being discussed. There is a newfound willingness to at least negotiate a reasonable solution. In our view, the answer lies in some sort of long-term compromise.
A few years back, a phased-in reimbursement was broached but went over like a lead balloon at that time before county officials. That idea called for Ocean City’s grant amounts to increase substantially over five years to more accurately reflect the 60 percent of the county’s revenue that comes from Ocean City.
Something along those lines is probably the answer today, but the question will be how amenable the county is going to be in regard to backtracking through the years of this unfair double taxation.
Having separate tax rates for non-Ocean City property owners and those living on the island could be problematic. However, equally so is simply increasing the county’s annual grant amount significantly to address the tax dollars collected on services already provided by the city, such as public works, recreation and parks, public safety and planning and permitting.
Although both ideas come with concerns, we think significantly increasing the grant amounts to Ocean City over 10 years is the answer. The Ocean City Mayor and Council would then need to lower its property tax rate to show city property owners the necessary savings.
The devil is in the details and there are many issues to iron out. The good news is there appears to be a solid working relationship between the city and council now and there has been an acceptance of double taxation on some level. This wrong can’t be righted at the expense or detriment of non-Ocean City property owners, but there’s a fairness issue to Ocean City landowners that must be at the top of this weighty decision making process. A continued open dialogue on the matter will benefit everyone.
