OCEAN CITY — With a new fiscal year budget process looming for both jurisdictions, the Town of Ocean City this week fired off a letter to the Worcester County Commissioners seeking a series of sit-downs on the long-standing issue of tax differential.
Last year, the Ocean City Mayor and Council submitted its annual tax differential request to the county seeking relief for resort taxpayers for the double cost of duplicated services. Each year, Ocean City seeks tax relief in the form of a set-off for services duplicated by the two jurisdictions and essentially paid for twice by the resort’s taxpayers.
For years, Ocean City has requested tax differential from the county and has consistently been denied. Instead, the county makes unrestricted grants to the resort for a variety of uses in an attempt to offset the cost of tax differential. Ocean City and the county have for years been at odds over the amount of duplicated services in question, but there has been an effort recently to find a resolution.
In 2013, Ocean City commissioned a study, conducted by the Municipal and Financial Service Group, that identified roughly $17 million in duplicated services provided by the resort. Last year, the County Commissioners ordered their own tax differential study that determined resort taxpayers were indeed paying more than their fair share for duplicated services. The county’s study, conducted by Tischler-Bise, concluded the county property tax rate for Ocean City residents should be around 74 cents per $100 of assessed value, while the rate for property owners in the county at-large should be around 82 cents.
While the difference between Ocean City’s study on tax differential and the county’s subsequent study are significant, the county’s study at least acknowledges there is some merit to the resort’s annual tax differential request and provides a jumping-off point for what could be a détente on the often fractious issue.
The Mayor and Council are requesting a series of meetings with the County Commissioners to discuss the issue anew in advance of the looming budget sessions for both jurisdictions.
“The Mayor and Council appreciate your efforts to address the property tax differential for Ocean City property taxpayers who also pay Worcester County property taxes,” the letter from Mayor Rich Meehan to the County Commissioners this week reads. “We believe that your decision to contract with the firm Tischler-Bise was a significant step in helping to come to a resolution on this issue.”
Meehan said in the letter addressed to County Commission President Madison Bunting and his colleagues the two independent studies by each jurisdiction could lead to some middle ground as the tax differential debate begins anew.
“As mentioned, the study that Worcester County undertook in 2016 was a good start to coming to an agreement on what the tax differential should be,” the letter reads. “The town has its own consultant who created a similar report in 2013. Both reports concluded that Ocean City taxpayers should receive a differential although the amount of the tax differential identified in both studies is significantly different.”
The letter suggests scheduling meetings between city and county officials this month and again in January to hash out a plan for addressing the tax differential issue in advance of budget sessions for each jurisdiction next spring.
“We will need further meetings with our respective officials and financial staffs to come to a mutually agreeable model to formulate a fair tax differential,” the letter reads. “Their recommended process would then have to come to our respected elected bodies for approval.”
