Court Ruling Ends City-County Tax Setoff Debate

Court Ruling Ends City-County Tax Setoff Debate

The decades-long battle over tax differential between Ocean City and Worcester County government is finally over.

All efforts have been exhausted for Ocean City to secure a tax setoff for duplicated services the town provides to its citizens that are also provided by the county but not utilized by those living in Ocean City proper.

The closure this week’s high court opinion brings is not crushing news for Ocean City. For years, Ocean City has requested tax differential from the county in the form of a tax set-off, or a county tax rate for property owners in the resort different from the tax rate paid by residents in the county at-large. The reasoning is the property owners in Ocean City already pay taxes to support certain services and programs such as police and emergency services, recreation and parks and public works, for example, services which the county does not necessarily need to provide in the resort. For years, the request has consistently been denied. Instead, the county makes unrestricted grants (upwards of $3 million in recent years) to the resort for a variety of uses in an attempt to offset the cost of tax differential. The argument has been made that number is not fair, as separate city and county studies determined the estimated cost of duplicated services for Ocean City residents totaled around $17 million.

There is a fairness issue here for Ocean City property owners, but the unfortunate reality here is any change on this front – validated by the court – would reap tremendous hardship on county residents.

It’s fine so long as Worcester County continues to adequately fund Ocean City at suitable levels. It has not always happened. Several budgets Worcester County Commissioner Joe Mitrecic voted against during his time in Snow Hill for the sole reason he did not believe Ocean City – his hometown where he served 10 years on the council – was properly funded by the county through the grant process.

The only issue with proceeding on this grant course to ensure fairness to Ocean City is politics. The faces and names will change in Snow Hill every four years due to the election cycle. The support for Ocean City – the county’s cash cow – could wane. It’s a relationship to carefully monitor for Ocean City officials. Ensuring there is a fair and equitable course is the only option as the court battle is over. All avenues have been pursued and enough tax resources through legal bills exhausted over this effort.

The focus must now turn to keeping the relationship between the city and council are firm footing. It’s been many years since the relationship between Ocean City and the county has been as healthy as it is today. A shining example is the fact Worcester County has finally agreed to provide the resort with funding to support its fire department for providing emergency service coverage to West Ocean City, which is not part of municipal Ocean City. This was a seismic shift in policy for the county. It should have happened years ago, but at least there is compensation now.

As the press release statement from the county said this week, the relationship is better with the resort now. It read, “WCG and Ocean City officials have been working cooperatively to reach an equitable funding agreement that benefits the town without negatively impacting taxpayers who reside outside of the corporate limits of the town.” Ensuring this commitment remains in place is the challenge moving forward.

About The Author: Steven Green

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The writer has been with The Dispatch in various capacities since 1995, including serving as editor and publisher since 2004. His previous titles were managing editor, staff writer, sports editor, sales account manager and copy editor. Growing up in Salisbury before moving to Berlin, Green graduated from Worcester Preparatory School in 1993 and graduated from Loyola University Baltimore in 1997 with degrees in Communications (journalism concentration) and Political Science.