OCEAN CITY – Resort officials took another crack at the budget this week with a second reading of the fiscal year 2008 budget. After reviewing past and current discussion of issues surrounding the budget, a formal adoption of the budget was made.
The mayor and council on Monday unanimously passed the fiscal year 2008 budget on second reading, marking the formal adoption of the roughly $120 million budget.
The first reading of the budget was passed on May 21, and focused greatly on the property tax rate which, depending on how one looks at it, could be seen as a modest reduction or a significant increase. The property tax rate in Ocean City will be set at 41 cents per $100 of assessed value. This represents a 2-cent reduction over the current property tax rate, however, it also represents a 5-cent increase over the constant yield rate.
The constant yield rate, put simply, is a formula that works to determine a property tax rate that will generate the same amount of revenue as the prior year.
The decision was made by the Mayor and council last month to set the property tax rate at 41 cents; 2 cents lower than the current property tax rate, which will result in around $4.9 million in new revenue. They chose this over a property tax rate of 43 cents, which requires a reduced constant yield of 36 cents. That issue and its discussion at last months meeting sparked several complaints and requests from citizens to keep the tax yield at 36 cents, a request that would result in lower revenue but also lower taxes overall.
Most people felt the increase in property tax would have adverse affects on both consumers and business owners.
This week, upon second reading, the Mayor and council approved the property tax rate and the budget. Once again however, they were faced with grumbles from those in attendance of the meeting, with one resident requesting a veto of the budget.
David Fox addressed his concern over enterprise funds such as the Municipal Golf Course Fund, the Convention Center Fund, and the Airport Fund. He suggested privatization of these enterprises.
Mayor Rick Meehan explained that this is the last year that the Municipal Golf Course Fund will be included in the budget. He also said that the Convention Center brings a lot of revenue to Ocean City, making the fund more than worthwhile.
Mayor Rick Meehan said, “We will continue to analyze salaries and benefits and look for ways to offset those expenses.” As for the budget as a whole, Meehan said he supports the council on the budget. “They worked diligently on it throughout the process.”