It was interesting to learn this week Ocean City is going to preliminarily work off two budgets for the next fiscal year – a pre-COVID-19 one and a post-COVID-19. The town’s fiscal year runs from July 1-June 30. With the town’s economy essentially shut down currently, the city should expect to see a major reduction in room tax and other fees associated with tourism to close out the current fiscal year. The question city officials will face in the coming weeks is the same many in private business have been asking: how long will commerce be shut down?
City Manager Doug Miller said the town had a proposed budget prepared earlier this month before the virus pandemic. The city has a revised budget that takes into account the crisis unfolding currently by comparing it to the recession of 2008.
“We have a pre-COVID-19 budget we’re ready to present. We’re also going to present a balanced budget with contingencies if this situation lingers and changes are needed. It might come down to some things being delayed or not done,” Miller said. “If we’re back completely in business by Memorial Day and go into June strong, there is still a lot of uncertainty. The financial impact of this is still unknown. A lot of people are taking a huge financial hit from this and taking a vacation in Ocean City this summer might not be in the cards for them. If we’re back to normal by Memorial Day and have a strong June, we’ll be okay… If we go beyond that, there will definitely be some challenges. Room tax is a significant part of the town’s revenue and most of that is collected in June, July and August.”
These sorts of discussions will be taking place across the country for the next month or so. All the conversations will involve officially planning for the worst on paper, while privately hoping for the best.
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Maryland Gov. Larry Hogan and President Donald Trump have many differences, but they both are to be credited for speaking in a blunt fashion during this period of crisis for our country.
While Trump’s language usage, especially his tweets, is routinely poor, Hogan has a softer way of putting difficult subject matter. During two press conferences this week, Hogan spoke honestly and simply to Marylanders. He admitted he doesn’t know what the journey holds for the state and its residents and businesses. It’s difficult to hear but the honesty is appreciated.
“I know how incredibly difficult this is and there is a great deal of anxiety. None of us know how bad this will get or how long it will last. Just know there is a great deal of people working around the clock on this. We’re all in this together and we will all get through this together,” Hogan said. “None of us can say with any certainty in four weeks everything is going to be okay. It’s a little aspirational. We’re not going to send kids back to school until we can ensure their safety. Over the next four weeks, we’ll reassess where we are and make the appropriate decisions at that time… The reality is, this crisis is just beginning. I know people are looking for certainty, but the truth is we just don’t know how bad it will get and how long it will last. What we do know is it won’t be over in a matter of days or even weeks. It’s critically important every single individual stay at home so we can break the back of this virus.”
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It was surprising Berlin Mayor Gee Williams rescinded his tax increase proposal this week. With the ongoing economic and health crisis, I thought the tax increase would be dropped during the budget process. However, Williams got out in front of it this week. He said his proposal to hike the property tax rate by three cents (or 4%) was being withdrawn at this time.
In an interview as well as in a letter to residents, Williams explained why he was dropping the tax rate from consideration at this time. For the last year, it was widely accepted a second tax increase would be coming this budget cycle on the heels of last year’s increase. The reasoning being the town needed to build its reserves while also making each utility fund within the budget self-sustaining.
In his interview, Williams said, “I don’t want people worrying about that when there’s so much else to deal with right now.”
His statement said, “As mayor, I have decided that when the town’s Fiscal Year 2021 budget process resumes in April, I will not be recommending any property tax increase in our new municipal budget. I will propose holding the tax rate to 80 cents per $100 of assessed value, which is the current rate. As this crisis unfolds it gives us time for reflection, and once again we should be grateful to live in a rural community with a significantly less dense population than suburban and urban areas. This does not mean any of us are immune to the coronavirus, but with reasoned, informed actions and consideration for our family and others, we all can minimize the spread and impact of this disease in our area.”
