OCEAN CITY – Ocean City residents could have the opportunity to vote on an ordinance passed late last year that will scale up the percentage of room tax dedicated to destination marketing after a petition for referendum drive appears to have acquired the requisite number of signatures.
In December, the Mayor and Council narrowly passed an ordinance that will alter the formula for how a percentage of room tax generated in the resort is distributed to marketing and advertising. By way of background, Ocean City’s room tax in 2019 was raised from 4.5% to 5% with about 44% of the revenue dedicated to marketing and advertising and 56% dedicated to the town’s general fund to help offset the cost of increased tourism, such as increased fire and police services, public works, salaries and overtime, for example.
The council was presented different options on how best to distribute a percentage of the room tax revenue to destination marketing. The option ultimately chose by the council on a 4-2 vote was to scale up the contribution of room tax to destination marketing and advertising in the coming fiscal years. For fiscal year 2023, the policy of 2% of the room tax revenue collected in the resort would be dedicated to destination marketing, while scaling up the percentage for that purpose to 2.1% in fiscal year 2024 and 2.2% in fiscal year 2025.
There are essentially two schools of thought regarding the distribution of room tax revenue in the resort. On the one hand, dedicating more of the room tax revenue to marketing and advertising will only grow the revenue source by attracting more visitors to Ocean City. On the other hand, attracting more visitors to Ocean City, particularly in the shoulder seasons and offseason with more and more special events puts additional strain on essential services such as police, fire and paramedics, public works and other departments.
Local resident Vince Gisriel has publicly challenged the ordinance on the grounds the scaled increases in the amount of room tax dedicated under the broad umbrella of marketing and advertising would exponentially grow those budgets at a rate faster than the general fund growth. To that end, in December he sent a letter and a draft petition for a referendum on the room tax ordinance to the city solicitor for approval.
The city solicitor approved the draft petition on the room tax ordinance, setting in motion a 40-day window in which Gisriel would need to acquire the requisite number of signatures to bring the question to referendum. The city charter requires signatures representing 40% of those who voted in the last municipal election. With 1,528 votes cast in the last municipal election, the target number for a successful petition was 612. On Monday, Gisriel submitted 168 petition pages consisting of 807 signatures.
City Clerk Diana Chavis this week confirmed her office is in receipt of the 168 petition pages consisting of 807 signatures. Chavis said a meeting will be coordinated with the Board of Supervisors of Elections, which will meet around mid-March to verify petition signatures are qualified Town of Ocean City registered voters.
In a letter to the editor last month, Gisriel outlined his reasons for seeking a repeal of the room tax ordinance passed by the council in December, writing, “This new ordinance replaces an earlier one passed in 2007, which was flawed from the outset … As the room tax dramatically grew, funds from the revenue source to the general fund for such essential services as police payroll and overtime, and additional EMS shifts, only grew by 30%, while funds from the room tax for advertising increased 324%. This caused a major imbalance in the budget.”