OCEAN CITY — If the Town of Ocean City is going to be successful in its attempt to gain tax differential, or tax setoffs, from Worcester County, it doesn’t appear much support will come from outside sources and a legislative remedy does not appear realistic.
Each year, the town seeks tax relief for its taxpayers from Worcester County for the cost of services duplicated by the two jurisdictions. For years, the county has responded with grants to the resort, some restricted and others that aren’t, that represent a fraction of what two independent studies have shown to be the real expense to resort taxpayers for duplicated services provided by both Ocean City and the county.
The independent study commissioned by Ocean City determined the cost of duplicated services for Ocean City residents totaled around $17 million. The county’s study, meanwhile, reached the conclusion the town’s tax differential request was valid and recommended two different county tax rates for Ocean City residents and residents in Worcester at-large as a means to offset the tax differential debate.
In late August, the Mayor and Council got a breakdown on the two independent studies and promised to meet with the County Commissioners and their staff again this fall to begin new discussions on a remedy of the tax differential issue. While there is an apparent thaw on the issue after decades of consternation between the two sides, it remains to be seen if an amicable agreement can be reached.
In the meantime, there have been veiled threats of legal action, or even exploring a possible legislative remedy, but the latter appears to be a long shot. Former Ocean City Councilman and fiscal watchdog Vince Gisriel this week offered up some numbers to the Mayor and Council and recommended a two-prong approach to finally getting tax differential relief.
Gisriel on Monday recommended bringing taxpayers from Worcester County’s other three municipalities into the tax differential debate and the attempt at possible relief from the General Assembly, but acknowledged residents in other municipalities, including Berlin, Snow Hill and Pocomoke, are likely comfortable with the status quo.
“I thought if we went to some of the other municipalities in the county and sought their assistance on tax differential, we might get more favorable treatment in Annapolis,” he said. “The mayor pointed out in his experience in talking to some of the other elected officials that they’re not too inclined to support tax differential because they enjoy grants from the county that they think are favorable to what they would get with tax differential. The general consensus with other municipalities is they want to keep their grants and I don’t see any relief coming from them.”
Gisriel also pointed out Commissioner Joe Mitrecic, who represents Ocean City, is only one of seven in Snow Hill and the other six aren’t likely to get behind the resort’s tax differential request because they are beholden to their own constituents.
“Frankly, I think looking back on this locally we’ve been approaching it the wrong way,” he said. “You’re not going to get six County Commissioners to support it when their own constituents in the county don’t want this.”
With that said, Gisriel turned his attention to a vast silent majority of non-resident property owners in Ocean City who heretofore have not had a dog in the fight. Gisriel suggested attempting to gain the support of the thousands of non-owner occupied residential accounts in Ocean City who don’t have a voice in the tax differential debate. He said there are roughly 2,400 owner-occupied residential properties in the resort that contribute a little over 7 percent of the tax base. However, here are roughly 24,000 non-resident accounts, mostly condos that are rented or used seasonally, that represent about 88 percent of the property tax base.
“The lion’s share own property here, pay taxes and don’t vote, and yet they don’t have any relief at all from tax differential or the cap,” he said. “My suggestion is to start a campaign and emphasize to all of the owners that if they can write to their legislators in Annapolis about the unfairness of this tax differential and how it is impacting them, I think it will meet with more success. If you went down the list, you’d find addresses for non-resident property owners from every county in this state.”
Gisriel suggested reaching out to the thousands of non-resident property owners and urging them to contact the legislators in their home counties could help turn the tide on possible tax differential legislation in Annapolis.
“If they all got on the bandwagon, I think that could be a way to get tax differential through the legislature finally,” he said. “A local delegate or senator could introduce it and with a groundswell of support from property owners all over the state, I can tell you 20 letters from constituents in their jurisdictions will get their attention.”
While receptive to Gisriel’s recommendations, Councilman Dennis Dare, who was on the front lines of the tax differential debate for decades as former city manager, said there was a potential flaw in reaching out to the non-resident property owners who live on other counties all across Maryland.
“Something we have to keep in mind is in the state of Maryland, only 15 percent of the population lives in municipalities, so most of the legislators represent citizens who are not in municipalities, maybe 85 percent,” he said. “For them to vote on something, if you’re considering statewide legislation, they need to reflect who they’re representing. Statewide legislation on tax differential would be a real uphill battle.”
Dare also pointed out any attempt at legislation in Annapolis would likely have to come with strong local support and said outside of Ocean City, there appears to be little will to support it. Dare said even Ocean City’s Delegate Mary Beth Carozza and Senator Jim Mathias would likely have a tough time getting behind legislation because they are beholden to constituents throughout their respective districts.
“If the legislation you have in mind is just for Ocean City, I know the first thing they do when you get to Annapolis is look to see if your local delegation proposes it and supports it, and without that, you’re facing an uphill climb,” he said. “Again, probably one of seven of our commissioners would support tax differential legislation, and even with our delegates and senator, their constituents in Ocean City are such a small percentage of their overall constituency that they represent. I like you’re thinking, but we need to consider the reality of what those numbers are.”
Nonetheless, Mayor Rick Meehan pointed out it would likely be beneficial for the town to reach out to the non-resident property owners for support on the tax differential issue as Ocean City moves closer to renewed deliberations with county officials.
“It never hurts to encourage people to support the Town of Ocean City and its quest for tax differential,” he said. “I’ve had that conversation with the condo management associations in the past and I’ll do it again to encourage them to have their members support this because they represent the largest segment of the property owners. Any time you can get some support, you have to take advantage of it because we know we have an uphill battle here. If we’re going to continue to fight the battle, let’s get all of the support we can.”
