OCEAN CITY – Approval of a budget amendment this week led to a larger discussion about the town’s advertising funds.
On Monday, the council voted 6-0, with Councilwoman Carol Proctor absent, to approve the first reading of several budget amendments for fiscal year 2023.
The change reflects an increase in room, income and admissions tax revenues, and an increase in grant, salary and advertising expenditures, among other things. Following Monday’s vote, however, Councilman John Gehrig voiced his concerns regarding aspects of the budget amendment presentation. He pointed out the budget amendment labeled the increased advertising budget as a challenge.
“I just think we need to change our mindset here …,” he said. “Advertising is not funded by property tax. Advertising is funded by room tax. Room tax is generated when people visit Ocean City.”
Among the budget changes approved on first reading this week was an amendment to the budgeted room tax, which exceeded revenue projections. Gehrig said that money was used to pay for public safety, public works, roads and debt service, among other things.
“We are above budget, basically did better than what we expected,” he said. “We had $1.2 million from room tax above budget, which is over a penny on our tax rate. That goes towards funding our bills, paying our bills from the general fund.”
Gehrig argued the town should be celebrating its successes.
“All we do is beat down our revenue source,” he said. “It’s our secondary source, but it’s our fastest growing percentage wise.”
He added that the town should be supporting its advertising budget.
“Instead of looking at the 60% going into the general fund, we persistently looking at the 40% going into advertising,” he said. “Every dollar we spend in advertising is clearly making us more money, every year.”
With increasing access to destinations around the world, he argued Ocean City should be competing on digital platforms.
“We just think people are coming to Ocean City because we’re sitting here, because we have a beach,” he said. “We must be living in a time capsule and are out of touch with reality.”
For his part, City Manager Terry McGean said he meant for the presentation to show accounting challenges.
“I apologize if it came across that way,” he said. “I really think the intent, when the word ‘challenge’ is used in this presentation, is it’s more of the accounting challenge. But I understand how it comes across so we will work to change that perception in the future.”
