OCEAN CITY — One week after Worcester County agreed to explore how Ocean City arrives at its tax differential request totals, at least one Ocean City elected official believes the resort should begin preparing for a potential legal battle over the long-standing issue.
Last week, the Worcester County Commissioners agreed to fund a review of Ocean City’s annual tax differential request and pursue a study of its own in an effort to determine its own number. In its simplest terms, tax differential is the cost of duplicated services such as police and fire protection, for example, that Ocean City provides for itself through the taxpayers, yet is taxed at the same rates as other municipalities in the county.
Earlier this month, Ocean City submitted to the county a formal tax differential request and agreed to set up future meetings with town officials to once again discuss the issue, but the long-simmering battle is already heating up.
“Property tax set-offs are intended to compensate for double taxation of municipal taxpayers occurring when both municipal and county taxes are levied to fund similar or identical services,” Ocean City’s letter to the county reads.
In the spring, Worcester County agreed to fund a tax differential study, and the bidding process is currently underway.
For years, Ocean City has requested tax differential from the county and has consistently been denied. Instead, the county often makes unrestricted grants to the resort for a variety of uses in an attempt to offset the cost of tax differential.
This year, however, Ocean City might consider taking legal action if the county is once again not receptive to its tax differential request. On Monday, when town officials and members of the audience were doling out there wishes for the holiday season, Councilman Dennis Dare made a wish of his own.
“I’ve got a wish,” he said. “I wish we had tax differential. With our strategic planning, it was abundantly clear to have our residents treated fairly and the need to move to an agreement with Worcester County for not paying for services we don’t receive and that we fund ourselves. There is a long history there and we’ve always been brushed aside. State law says you have to have a request in six months before tax time and one year we sent it in a week late, or maybe even a day late, and we are brushed aside. It was ridiculous. I thought last year we had a pretty good proposal and we got brushed aside again.”
Dare said on Monday he was aware of the county’s attempt to conduct its own study into Ocean City’s annual request and held out little hope for détente on the issue again this year. Dare suggested to his colleagues they begin to explore a potential legal remedy to the tax differential issue should it not be resolved to the resort’s satisfaction again next year.
“Personally, I think we might need to proceed more through the courts from a legal standpoint,” he said. “What I would ask is to include a line item for discussion in the budget process, putting in funding for legal advice on how to proceed from a legal standpoint should we not be able to reach an agreement with Worcester County on tax differential.”
There was no action taken nor any further discussion of the issue on Monday although the council took Dare’s comments under advisement.