Ocean City Adopts $127 Million Budget

OCEAN CITY — With little fanfare or discussion, Ocean City officials this week formally adopted the fiscal year 2019 budget at a little over $127 million, holding the town’s property tax rate at last year’s level.

After a weeks-long process during which the proposed budget was scoured over, the council unanimously approved the fiscal year 2019 budget on second reading on Monday with no more discussion. The total budget for all funds is just over $127 million with the general fund making up around $85 million, representing an increase of $653,503 over the current budget.

In March, Budget Manager Jennie Knapp presented an overview of the resort’s revenue projections and predicted some early numbers pointed to a possible modest property tax hike in fiscal year 2019. However, despite lower-than-expected property re-assessments in the first year of the current cycle in Ocean City, the budget approved this week maintained the current property tax rate at the same level as last year and comes in under the projected constant yield rate.

Property re-assessments in Ocean City this year came in around .24 percent lower than during the last re-assessment cycle resulting in an increase in the constant yield tax rate to .4667. However, the property tax rate for the proposed fiscal year 2019 budget is .4656, or the same exact rate as in fiscal year 2018. For the record, the constant yield is the amount of municipal funding needed to maintain the same level of services and programs as the prior year.

In other words, despite declining re-assessments, the proposed fiscal year 2019 budget comes with the same property tax rate as last year at .4656 per $100 of assessed value. If the town had opted to adhere to the constant yield policy to which it has for several years, the property tax rate could have increased to .4667. Instead, the approved budget maintains the same property tax rate as the prior year.

It’s also important to note the resort’s resident property owners are insulated from a potential tax increase by the Homestead Tax Credit, which the Mayor and Council reduced to zero percent a few years back. As a result, resident property owners will see no increase in their resort property tax bill while some non-resident owners could see a slight increase, or even a decrease, depending on assessments.

It has been the town’s stated policy in recent years to maintain a fund balance, or rainy day fund of sorts, at 15 percent of the general fund budget. However, the budget approved on Monday increases the fund balance to 22 percent, or roughly $6 million over the stated 15 percent policy. Roughly $1.6 million of the reserve fund will be appropriated to ongoing projects such as street paving and canal dredging, leaving the fund balance at around 20 percent.

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.