SNOW HILL – The Worcester County Commissioners this week approved enabling legislation that paves the way for a room tax increase.
On Tuesday, the commissioners voted 6-0 to approve legislation that will allow the county to increase the maximum room tax rate to 5%.
“This would enable you in the future to adopt a resolution to increase the hotel rental tax. The current rental tax is 4.5%. This leg would enable you to increase that to 5%,” said Kelly Shannahan, the county’s assistant chief administrative officer.
Ocean City officials were in attendance to support the legislation being considered this week. Mayor Rick Meehan said the rate hadn’t been increased in 10 years.
“That allowed us to increase advertising, move in front of the competition,” Meehan said. “As the economy faltered, we were able to maintain our numbers.”
In the years since, he said the cost of tourism related events had increased. Last year, he said the resort collected $15.6 million in room tax and 46% of that went directly back to tourism and economic development.
“General fund expenditures to support these tourism related events has increased $700,000,” he said. “This is for the increased cost for public works, public safety and other services we provide to increase our season, to increase our tourism base and to increase the economic benefit.”
He said the proposed increase in room tax, which would go into effect Jan. 1., would bring the town an additional $700,000 in fiscal year 2020 and would bring in $1.7 million in 2021.
“We feel to maintain the vitality and growth in Ocean City the increase in room tax is extremely important,” Meehan said. “That additional revenue will allow us to grow our tourism budget and also to invest in some of the things we think are very important to Ocean City — sports marketing, sports tourism. Those are priorities for Ocean City.”
Commissioner Josh Nordstrom asked what the proposed increase would mean for the county in terms of increased revenue.
Finance Officer Phil Thompson said once the increase was fully phased in it would mean additional revenue of $88,000 for Worcester County, $1.7 million for Ocean City, $17,000 for Pocomoke, $3,000 for Berlin and $1,000 for Snow Hill. He said those estimates were “pretty conservative in that respect.”
Commissioner Joe Mitrecic made a motion to approve the legislation.
“This is a pass-through tax to the visitors,” he said. “This doesn’t impact the property owners.”
The commissioners voted 6-0, with Nordstrom abstaining, to approve the legislation. The commissioners are now expected to introduce a resolution to actually increase the room tax rate to 5% in July, with a public hearing in August. That resolution will require a unanimous vote.
When asked why he abstained from the vote, Nordstrom said it was tied to the lack of support Pocomoke received from the county. He said every proposal he’d made on behalf of Pocomoke — he made several during Tuesday’s budget work session — had been ignored by his peers.
“I don’t believe that is the way to move forward,” he said, “so I have to do things like abstain to get a little attention. … “It’s politics. It’s ugly and it’s kind of silly at times but I only have so many cards to play.”
Nordstrom stressed that he wasn’t trying to launch a personal vendetta but was simply trying to work on behalf of his constituents in Pocomoke.
“It’s been a long time since we’ve seen any attention from the county,” he said. “I felt it was important to make some people listen.”