Local Officials Testify For Enabling Room Tax Legislation

OCEAN CITY – Local leaders say enabling legislation will allow the county to increase its room tax rate.

On Feb. 28, local officials came before the Ways and Means Committee in Annapolis to seek support for House Bill 931. As proposed, the enabling legislation would allow Worcester and other code counties to increase the maximum hotel rental tax rate from 5% to 6%.

“This is a bill that impacts Eastern Shore code counties, and it has to do with altering the hotel tax rate …,” Del. Wayne Hartman told the committee. “This bill is completely enabling. It does not raise any tax. It simply allows the county commissioners of those counties, and maybe some of the municipalities within those counties, to benefit.”

Last year, the Worcester County Commissioners, at the request of the Town of Ocean City, worked with state representatives to pass enabling legislation in the Maryland General Assembly that would allow the county to increase its room tax threshold. However, officials discovered the state constitution required Worcester to obtain approval from all other Eastern Shore code counties, including Caroline, Kent and Queen Anne’s counties.

“The Town of Ocean City and Worcester County wanted to simply increase room tax from 5% to 6%,” Hartman explained. “Through the bill drafting process, we found out that we are an Eastern Shore code county, and for us to have that, we need the support of our other three code counties, which are Caroline, Kent and Queen Anne’s counties. Hence, we are here this year with that knowledge.”

Hartman told committee members this week officials have since secured letters of support from all code counties on the Eastern Shore and reintroduced the legislation, cross-filed in the Senate as Senate Bill 612.

Mayor Rick Meehan said the proposed legislation would benefit jurisdictions such as the Town of Ocean City, which hopes to use room tax revenues to offset the increasing costs related to tourism.

“Room tax dollars support and fund our only industry in Ocean City, and that’s tourism,” he said. “It allows us to not only promote Ocean City as a summer vacation destination but also to fund the festivals and events that have helped us to expand our shoulder seasons.”

Meehan noted more than eight million people visited Ocean City each year, with more than 65% of visitors coming from outside the state of Maryland. He said tax revenue generated from tourism not only benefited the resort, but Worcester County and the state of Maryland.

“More importantly, the room tax helps to cover the increased funds associated with providing the services necessary to manage our expanding season and our growing visitor base …,” he said. “Our budget for safety has increased $5.7 million since the year 2020. We’re looking to hire more police officers and more firefighter-paramedics in this year’s budget, again, to make sure we can provide the services that are necessary to be able to take care of all the visitors that come to Ocean City. The increase in the room tax of up to 6% would help dramatically in being able to do that.”

Meehan asked the committee for a favorable report on House Bill 931.

“Our goal is to make sure our Ocean City is always clean, safe and welcoming to our visitors,” he said. “This additional revenue would help to do that. Public safety is 41% of our budget. This revenue would help to offset those expenses.”

About The Author: Bethany Hooper

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Bethany Hooper has been with The Dispatch since 2016. She currently covers various general stories. Hooper graduated from Stephen Decatur High School in 2012 and the University of Maryland in 2016, where she completed double majors in journalism and economics.