Ocean City Pursuing Last Option In Tax Differential Suit

OCEAN CITY — Despite hitting an apparent dead end in the town’s ongoing dispute with Worcester County over the tax differential issue, Ocean City officials are pursuing one more legal remedy.

Last week, the state’s Court of Appeals issued an order denying the town of Ocean City’s petition for a writ of certiorari which would have resulted in the state’s highest court taking up the court. The Court of Appeals order appears as a brief, terse entry in the Worcester County Circuit Court docket.

“Upon consideration of the petition for writ of certiorari to the Court of Special Appeals, it is ordered by the Court of Appeals of Maryland that the petition be denied as there has been no showing that a review by certiorari is desirable and in the public interest,” the docket entry reads.

That ruling appeared to have brought an end to Ocean City’s legal remedy in terms of the state’s appeals process, but the town has another legal option to attempt to get the case in front of the lower Court of Special Appeals. It’s a complicated, technical process to be sure, but City Solicitor Guy Ayres said this week there are two ways to get the case in front of one of the state’s higher courts.

“There are two ways to get to the Court of Appeals,” he said. “The first is a petition for writ of certiorari, which was denied. The second is to bypass the Court of Special Appeals and ask the Court of Appeals under the writ to take the case from the Court of Special Appeals. That’s what’s happened in this case. When the Court of Appeals denied the writ, that didn’t end the litigation. It just sends it back to the Court of Special Appeals.”

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Last January, after years of veiled threats, the town of Ocean City and the majority of its elected officials filed a petition for declaratory judgment against Worcester County seeking judicial relief on the long-standing tax differential issue. In simplest terms, tax differential, or a tax setoff, may be granted by a county to a municipality for services and programs duplicated by the two jurisdictions.

Following a motions hearing last October, a Worcester County Circuit Court judge ruled in favor of the county on the most salient aspect of the suit. At the heart of the issue is a portion of the state law under the Municipal Home Rule Amendment of the Maryland Constitution that designates some counties in Maryland as “shall” counties, which require those counties to provide tax set-offs for services provided or duplicated by its municipalities.

Other counties are declared “may” counties, in which tax set-offs to the municipalities are optional. The town of Ocean City argued the designation of some jurisdictions as “shall” counties and others as “may” counties was unconstitutional. On that issue, the judge ruled in favor of Worcester County and with the issuance of an order granting the county’s motion for summary judgment effectively closed the case at the circuit court level.

In terms of the apparent divide between the amount of tax differential, or tax setoffs, owed by the county to Ocean City and the annual grants to county makes to the resort, the circuit court was more sympathetic. The judge sympathized with town’s argument the annual grants from the county to the town did not offset the cost of duplicated services.

Ocean City then sought legal remedy from the state’s appeals courts. While the Court of Appeals denial of the petition for certiorari last week certainly qualifies as a setback, the town is now pursuing an attempt to have the case heard by the lower Court of Special Appeals.

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.