County To Study Tax Differential; Ocean City Again Submits Request

SNOW HILL – Ocean City officials are again seeking a tax differential from Worcester County.

Early this month, the Town of Ocean City submitted a formal property tax differential request. County officials have agreed to set up a meeting with municipal officials and in the meantime will attempt to study the issue.

“In the budget we did include money to have the county do its own tax differential study,” said Kathy Whited, county budget officer. “We are in the process of receiving proposals from agencies regarding that.”

The Worcester County Commissioners agreed in the spring to have the county pursue a tax differential study of its own after viewing the one submitted by Ocean City with its annual funding request.

The Town of Ocean City has sought tax relief from Worcester County for years. According to resort officials, because the town uses many of its own services instead of those provided Worcester County, it should receive a tax break.

“Property tax set-offs are intended to compensate for double taxation of municipal taxpayers occurring when both municipal and county property taxes are levied to fund similar or identical services,” reads the 2013 study the Municipal and Financial Service Group performed for Ocean City.

This month resort officials submitted the study to the county along with their tax differential request, as they did last year. The study identifies $17 million of the county’s roughly $120 million in property tax revenue as funding that should not be paid by Ocean City taxpayers. According to the Municipal and Financial Service Group, that $17 million would equate to a tax differential of $0.269, which would adjust the county tax rate to $0.687 for Ocean City and $0.956 for the rest of Worcester County.

Services the report says Ocean City shouldn’t have to pay for include tourism, public works, recreation and parks, fire marshal, development review and permitting, police and environmental programs. According to the study, those departments do little for the resort because it offers similar or identical services.

Instead of adjusting the tax rate, this spring Ocean City officials proposed a new funding formula that would gradually increase the amount of county funding the resort received from the county. The municipality wanted to see its funding from the previous year, a little more than $3 million, be increased to $5 million. In a 4-3 vote, however, the commissioners kept the funding flat.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.