SNOW HILL – Room tax in Worcester County will increase following a unanimous vote by the Worcester County Commissioners this week.
On Tuesday, the commissioners voted 7-0 in favor of increasing the room tax from 4.5% to 5%. The vote came in spite of indecision voiced in previous weeks by District 1 Commissioner Josh Nordstrom, who said if his peers wanted his support they would have to acknowledge the needs of southern Worcester County. Nordstrom’s support was critical because the increase must have unanimous support for the commissioners.
He said after Tuesday’s vote he was hopeful those needs would be discussed at the commissioners’ next meeting and that he thought an increase in room tax would benefit the whole county.
“I felt it was the right thing for the county,” Nordstrom said. “I always felt that way. I think it’s going to be great for tourism … I’m hopeful my proposals regarding the southern end of the county will be well received in the first meeting in September.”
The room tax increase was proposed by Ocean City officials early in 2019 so the resort could intensify its advertising efforts and help offset the costs of special events. Nevertheless, two Ocean City residents asked the commissioners Tuesday to delay the increase.
“The town right now has $7.6 million in theory to spend on advertising,” resort resident Vince Gisriel, a long-time former councilman, said. “To give you an idea what that is, that’s the equivalent of 18% of our tax rate in terms of dollars. There’s a question of how much advertising you really need. I think, and others think, we’ve reached a point of diminishing returns.”
He said there was no consensus among Ocean City politicians on how additional revenue would be spent. He said there had been some talk of pursuing development of a sports complex, something the county itself had opted not to move forward with for valid reasons.
“I don’t know how many things the taxpayers of Ocean City can continue to subsidize…,” he said, adding that they already supported the convention center, the airport and Eagles Landing Golf Course. “If it was such a great idea, a sports complex, where are the private investors? Why aren’t’ they building it?”
Ocean City property owner Tony Christ also asked the commissioners to delay voting on the room tax increase. He said that in 2004, the resort’s advertising budget was $1.1 million. Now, he said it was $7.6 million.
“There’s a lot of people in Ocean City that would like to have that $7.6 million and let the businesses do their own advertising,” he said. “Give some relief to property owners. Property values according to the Washington Post are below the 2004 level in Ocean City.”
Christ added that government in Ocean City had grown exponentially during the last 40 years while the number of residents hadn’t really increased.
“The fact that government’s gone up a thousand percent has jacked the prices up,” he said. “The retail guys are just going to add it on. It’s caused Ocean City to lose its most valuable asset which was the blue collar worker and their families. They’re gone. We’ve developed into this shoulder community where we’re trying to build up this shoulder and that shoulder and call it a city. Unfortunately, we already have some signs of city in hunger and homeless. The other signs are on the come because what we lost was huge. The lunch pail guy with the two kids can no longer afford to come or he comes for two days. To feed this need to keep expanding government in non-public good areas doesn’t really make sense.”
Ocean City Mayor Rick Meehan, however, said the room tax increase was vitally important to the town. He said room tax rates in surrounding vacation destinations were all higher than the 5% Ocean City wanted. He said the rate was Rehoboth Beach had just increased its room tax to 11%. He said the room tax rate was 13% in Myrtle Beach and 8% in Baltimore.
“They do that for a specific reason,” Meehan said. “They do it to remain competitive. We need to remain competitive as well. The last time we raised our room tax 10 years ago was when the economy was sinking. We realized that’s not the time you make cuts in advertising, that’s the time you reach out and entice people to come to your community.”
He said that had enabled the resort to maintain its number of visitors throughout the economic downturn. He said that by using advertising money to bring people to town, everyone benefited.
“The success of our businesses allows our assessable base to grow,” he said.
He added that marketing had changed in recent years and that Ocean City needed to adjust its own efforts to focus more on its website and social media. He believes the resort also needs to take advantage of the growing sports tourism industry.
“This is a market that’s there and we need to reach into it and tap it even more…,” he said. “That’s good family business to Ocean City. That’ll help bring business to all of Worcester County. It will create jobs. What we do with our room tax creates jobs.”
Susan Jones, executive director of the Ocean City Hotel Motel Restaurant Association (HMRA), also spoke in favor of the room tax increase. She said it was particularly important because there were so many new hotel rooms that had recently been added to the resort area.
“Because of the 10% increase in supply we have to figure out how to collectively work together to fill those rooms,” she said. “We can’t bring you the room tax revenue unless we do advertise.”
Commissioner Joe Mitrecic made the motion to approve the room tax increase, which will go into effect Jan. 1, 2020.
“I don’t propose that the county should tell Ocean City how to spend their money because I’m sure we wouldn’t like Ocean City to tell us how to spend ours,” he said. “A lot of the comments made earlier were a little, not really germane to our discussion I don’t think. This is a request made by the Town of Ocean City who has the majority of the hotel rooms in the county. This is also supported by the HMRA, who represents the hotel owners, so I have to assume that the hotel owners themselves support this increase.”