OC Needs To Explore Other Revenue Sources
I read with great interest Editor Steve Green’s “Between the Lines” accounting of the exchanges between Ocean City Council members concerning the decision to abandon the constant yield formula as a baseline for assessments in favor of a constant rate formula.
The comments made by those who support this change are either incredibly naive or purposefully misleading. Ocean City and Worcester County are incredible tax havens for local residents. Aside from having the lowest income tax rate in the state by a wide margin, Ocean City has opted to exempt owner occupied residents (voters) from any tax increase associated with increases in assessments.
By adopting a constant rate formula and knowing that owner occupied residences do not have tax increases due to increases in assessments, this amounts to a perpetual tax freeze for all owner-occupied residences in the city. Indeed, with the tax rate going up to 0.4656 per hundred, a resident property owner living in a house assessed at $400,000 will have a $28 increase in his/her tax bill. Unfortunately, non-resident property owners get hit with the double whammy of both a rate increase and an assessment increase.
I have a property that has a tax assessment of less than $200,000. When I calculate for the increase in both the tax rate and assessment valuation, my Ocean City taxes will increase by more than $128. As a non-resident property owner, I feel like I am walking through a crowded room filled with pickpockets every tax season. The city is raising the local room tax to 5%. That is only 1/2 of a percent increase but we are next door to Delaware where there is no such tax. Combined with the state sales tax, it puts renting condo owners at an 11% disadvantage compared with properties just over the state line.
It is time for Ocean City to start looking for other revenue sources. The Homestead Credit, which Ocean City and Worcester County are using to shield locals from tax increases, was designed to prevent assessments from driving individuals with modest incomes out of their homes with tax increases. It was never intended to freeze the taxes of folks in million-dollar homes. This whole concept is like rent control in some cities that has gone off the rails.
It seems like a good idea until you realize that the property tax on anyone buying a house or condo has risen to such a level that it begins to undermine the sales market.
Tax Authority Again Abused In Ocean City
A stated goal of the Ocean City Parking Task Force is to use increased parking revenue to make sure day-trippers pay their fair share of the cost for beach cleaning, maintaining the Boardwalk and infrastructure and other amenities that make Ocean City a desirable destination
According to Dan Kupferman, the parking consultant hired by Ocean City Engineer Terry McGean, “Ocean City is not going to become a ghost town because of paid parking” and that people have expectations to pay for parking. He makes a valid point regarding parking but fails to recognize that visitors look at their total cost to vacation in Ocean City. Their additional total costs could include not only paying more for parking but also paying more from the pending increase in the room tax.
Our elected officials are attempting to pass a bill that will raise the room tax rate of 4.5% to 5%. According to a report provided to our elected officials, this added .5% expense will be passed on to visitors. The aggregate costs over time of the many small fee and tax increases may not make Ocean City a ghost town but it can be a deciding factor in whether to go to Disney or visit Ocean City.
In regard to Mr. Mr. Kupferman opinion that people have expectations to pay for parking, I recently visited Daytona Beach during its bike week. I was struck by the amount of free parking and free beach access in Daytona Beach and surrounding communities. For example, SRA1A, the main highway, is their Coastal Highway. Free parking was generally permitted along both sides of A1A. In addition, many bike trailers were also parked on A1A without incurring any fee or permit requirements. Also, all along A1A there were parks like the Andy Romano Park (https://www.daytonabeach.com/listings/andy-romano-beachfront-park/1122/) where people could pull off A1A, park for free next to the beach, have access to free restrooms and showers and walk to the beach. In speaking with residents and visitors during bike week I got the impression that everyone recognized the town were not out to squeeze every last tax dollar from their visitors.
There is no doubt that parking fees will be increased even though Mayor Rick Meehan told us that he will not support any additional paid parking areas. Politicians find clever ways of repudiating their campaign positions. For example, new Council member Mark Paddack, who ran against any property tax increase, now has been “educated” about the city’s financial problems and voted to increase the property tax rate to bring in an extra $638,000. Then we have Council member Dennis Dare, who since he was city manager, wants all streets east of Coastal Highway to be plastered with parking meters from the Inlet to the Delaware state line. Unfortunately, the council believes that revenue shortfalls are best resolved by using their unlimited taxing authority to increase parking fees instead of implementing costs cutting measures.
Team Refuge of Northern Worcester County Relay for Life wish to thank the following vendors and merchants for their donations. Their support and encouragement have helped us to raise funds in the ongoing battle to find a cure for cancer. All proceeds are donated to the American Cancer Society.
Thank you to Loca Madre, Sea Level, Countryside Café, SOSN, L’ete & Co., Coastal Cottage, Outback, Pin Up Girls, Beach Break, Seashell City, Bayville Liquors, Surf’s Edge, Sweet Disposition, Floaters, CVS, Linen Outlet, Magnolia Rifle, Seaside Country Store, Lighthouse Sound, Creative Concepts, Brasure’s Carpet, Lord’s Landscaping, SoDel Concepts, Carolina Street, Dagsboro Paint & Wallpaper, Maxim Hair&Nails, Ace Hardware, Hit the Deck, Kokinos, Old Pro Golf, Nick’s Mini Golf, Subway, Hocker’s McDonald’s and Ocean City Golf Course.