Council Dismisses Salary Cuts, Holds Tax Rate Steady

OCEAN CITY — The Ocean
City Mayor and Council found a way to cut a penny from the proposed constant
yield tax rate on Wednesday, but it refused to “kill morale” by cutting town employee
salaries further.

Depending on
perspective, the council either held the line on the tax rate by keeping it the
same as last year’s 39.5 cents per $100 assessed valuation or it potentially
cut taxes for property owners due to declining assessments.

Either way you look at
it, however, the 6-1 vote, with Councilman Joe Hall in opposition, to move the
budget to first reading on Monday night shot the first wave of excitement
through the recently grim council chambers for the first time in almost a year.

“What we were able to do
today is an unbelievable achievement in this economy,” said Mayor Rick Meehan.
“We have been cutting expenditures and right sizing our government since last
year, and we came into the final weeks of the budget process trying to merely
hold the line (at the proposed 40.5 cents), but we found a way to keep it at
39.5 cents, and I think that it’s one of the best budgets that I’ve ever seen
in Ocean City.”

Heading into the final
two weeks of budget hearings, the town had cut a reported $11 million from its
budget thanks in part to City Manager Dennis Dare’s “right-sizing” initiative,
interdepartmental shakeups and restructuring.

Couple those moves with
the town’s 20-month hiring freeze, retirement incentive program and new fees
attached to town amenities such as parking and bus service, as well as the
implementation of the taxi medallion franchise, which all will bring the town
more revenue, the town found itself in a position that many other jurisdictions
couldn’t possibly dream of in these economic times: keeping property owner’s
tax bills at either the same level or lower than last year.

What the council
wouldn’t do however, is buy into Councilman Joe Hall’s “everyone needs to feel
the pain” mantra of recent weeks, as he’s been outspoken in his belief that the
council should consider cutting town employee salaries up to 5 percent across
the board.

As Council President Joe
Mitrecic announced that his calculations saw the town just a mere $100,000
short of finding the $1 million in additional savings needed to cut the tax
rate from 40.5 to 39.5 cents, Hall launched into employee salaries, sending a
chill throughout the council chambers that was filled with employees and

“The town of Ocean City
isn’t just feeling a recession, it’s feeling a change in the dynamic of the
entire region,” said Hall. “West Ocean City and Ocean Pines have grown to the
point that they are now our competitors and people have left the island and so
have businesses. In order to sustain our way of life, I believe that it is
responsible to ask our employees to take an additional 5-percent cut in their

What Hall eventually
made a motion for, however, was a 2.5-percent reduction in employee salaries,
and to ask both the FOP and IAFF (Police and Firefighters Unions) to agree to
the same cut in pay.

The motion quickly died
in a 5-2 vote, with Hall and Councilwoman Margaret Pillas being the only
members of council in support.

However, what seemingly
enraged council members was the fact that Hall hadn’t done his proverbial
homework (ie, calculating the monetary savings a 2.5-percent or 5-percent cut
would accrue the town).

“The employees of Ocean
City have already given up their COLA and step increases which results in a
huge reduction of their pay already,” said Mitrecic. “They pay the same price
for gas and have been effected by the recession just like you or me, or anyone
else. To arbitrarily just throw out numbers without calculating it would save
us is just a ridiculous thing to say, and if this council even considers this,
I believe it’s totally irresponsible.”

Mitrecic calculated
during Hall’s commentary that a 5-percent cut in employee salaries would save
the town $1.3 million, while the 2.5-percent cut would save approximately
$535,000 or a half a cent on the tax rate.

Councilman Lloyd Martin
believed that cutting employee salaries further would “kill the morale” of a
workforce that has been largely credited with getting the council in a position
to even hold the line on the tax rate.

“If they were coming to
us and saying that they would be willing to cut their salaries 2.5 percent,
then I could maybe go along with this, but I’m not hearing that,” said Martin.
“We are going to have to keep making this town better, and we are going to have
to do it with next year’s budget too, but I think cutting their salaries
further, when we are asking them to do twice the work for the same pay would
just kill morale and we can’t do that in a resort town.”

Councilwoman Mary Knight
said what taxpayers should be looking at rather than employee salaries is tax

“I can’t imagine
demoralizing our employees who we have asked so much of to give even more to
us,” said Knight. “What smacks me in the face when I look at this is tax
differential, and just how much our property owners are paying to Worcester