Like most municipalities following the most reassessment process, the Town of Berlin has seen its property values jump tremendously. The town’s gross assessable real property base will jump by 8% on July 1, 2022, from $486.3 million last July to $525.5 million. Based on this change, the town could reduce its tax rate from 81.5 cents per $100 of assessed valuation to the constant yield rate of 78.6 cents to bring in the same amount of tax revenue as the current year.
It’s uncommon for governments to reduce taxes and use the constant yield rate to balance the budget. It’s likely to get no attention in Berlin during budget talks. However, what should be a focus is retaining the same tax rate as the rising property values will bring in an additional $143,948 to the town at the 81.5-cent rate, representing a 3.8% increase. Town officials were presented with tax increase options this week just as a launching point for budget conversations. Raising the property tax rate to 82 cents would bring in an additional $311,973, 4.4% more in revenue; jumping to 82.5 cents would boost revenues by $336,050, $5.0% increase; 83 cents, $360,127, 5.72%; and 84 cents, $408,280, 6.99%.
It was telling there was no scenario presented to reduce the property tax rate aside from the constant yield level. The town could decrease the tax rate for residential and commercial property owners and still see a gain in revenue, thanks again to the rising property values from the reassessment. The fact is governments rarely reduce taxes. Though it would have been interesting to see what shaving a penny or half of a penny off the existing tax rate would have netted the town in new revenues, it seems logical for Berlin to retain the same tax rate as the year before given its financial difficulties. Of course, keeping the same tax rate for Berlin property owners will result in residents having to pay more taxes because of their booming assessments.
It seems a certainty the town will focus on increasing water, sewer and stormwater fees in the next budget. Some even want the increases pushed forward for the last quarter of this fiscal year. This would be unfair and irresponsible. The town’s utility funds have long been a problem and it’s not an emergency to get them right sized before the next budget. The new funding injection from town users can be spread out over the next budget. If the town is going to increase its utility fees to the degree discussed already at town hall, there should be no consideration of a property tax rate increase. The council would be wise to remove a tax hike from the table and clearly articulate this to property owners early in the budget process.
For many years, there was an aggressive approach supported by many in Ocean City to combat the pop-up rally weekend. The idea was squeeze out the troublemakers by filling up available rentable rooms with guests from other events. This rationale seems to be coming into play now.
The timing may be right on the heels of a few years of major crackdowns by allied law enforcement agencies armed with new legislative approaches on towing, speed limit and tactical measures. It has become an uncomfortable weekend for the young people intent on wreaking havoc on public roads and destroying private property. Ocean City is essentially turned into a police state with advance notices from town officials to prospective visitors to stay away. It was much quieter than it has been with mild hopes the intense enforcement is paying off.
With the heightened police presence expected to continue at least this September, Ocean City seems to be ready to transition toward filling the weekend with events. The shoulder seasons are all about weekend special events serving as economic catalysts. Though details are scant at this point, a major concert festival is planned on the beach downtown for the typical pop-up rally weekend. Additionally, more details are coming forward on the proposed Ocean City Adventure Fest, which is looking to book the entire convention center for a full week. Anticipated events include a motorcycle rodeo in the parking lot, concerts in the performing arts center, a hunting and fishing expo and a gun show. Concerns heard this week included law enforcement’s need to use the convention center parking lot as a staging area for its command post as well as police worries about manpower needs regarding the gun show concept.
City Manager Terry McGean and Councilman John Gehrig were right with their comments about this event and its coinciding with the pop-up rally. McGean said, “We feel like we’re getting a handle on H2O (pop-up rally). We are maybe over the hump, but we’re not at the end of the road yet. They have concerns about losing this facility. It might be better to do it on a different weekend to be honest …” On the concept of booking events to push out the pop-up rally crowds, “If we fill the town that weekend and we’re booked, we make it more inconvenient for them. The more inconvenient and expensive we make it, the better it is for us … This saturation idea is not a new idea. We’ve been talking about this for 10 years. This is why we went from a couple of hundred cars to thousands of cars. We have never tried it. This is the first time.”
I like the scheduling conflict concept, but two significant events could be too much too soon on the heels of one successful pop-up rally weekend. My feeling is pick one of the events and encourage the other promoter to select a different date or try again next year.
