OCEAN CITY – Officials in Ocean City this week agreed to proceed with a property tax credit for active volunteer firefighters.
On Tuesday, the Mayor and Council had before them a proposal to implement a property tax credit for active volunteer firefighters. City Manager Terry McGean said the loss of revenue to the town would range anywhere from $7,000 to $9,000.
“The recommendation from myself would be to move this to ordinance and have it applied only to active volunteer firefighters,” he said. “The reason I have not included paid firefighters and police officers is because they are part of a collective bargaining unit, and it might be better to address that as part of a collective bargaining process.”
Currently, state law allows counties and municipalities to offer property tax credits to paid and volunteer public safety officers, such as police officers, firefighters and EMTs. In July, however, the law will change to remove a $2,500 tax cap and allow jurisdictions to establish their own.
“The other thing it does is it allows the jurisdiction to define what a public safety officer is,” McGean explained.
He told the council this week he was approached by the volunteer fire company about implementing a proposed tax credit in town. While the credit could be applied to police officers, active volunteer firefighters, non-active volunteer firefighters and paid firefighter/EMTs who own property in town, McGean said he was recommending it only be applied for active volunteer firefighters.
“With a $2,500 cap, the impact for active volunteer firefighters would be $7,000,” he explained. “If you take the $2,500 cap out, that would increase to $9,000.”
Councilman Peter Buas questioned if the tax credit appeared on the tax bill as a credit, or if it was a rebate. Officials said it would be a rebate.
“I think we should be doing whatever we can to incentivize town staff to live on the island,” Buas said. “However, I think the priority should be police and paid firefighter/EMTs. Rather than a tax rebate, I’d rather see us do a stipend for residency so that we’re capturing residents, for people that might rent.”
Simply put, Buas said he wanted to encourage all staff, not just public safety officers to live in Ocean City, rather that be through owning property or renting. He said he wanted to see town staff present a residency incentive plan.
“We want to encourage our staff to live on the island, and I don’t know if this will do it,” he said. “I’d rather take a bigger swing at it.”
McGean, however, said the intent of the proposed property tax credit was to incentivize active membership within the volunteer fire company.
“I think the intent from the volunteer fire company and the intent of what I presented is to encourage more active service from the volunteers,” he replied. “That’s why my recommendation only applied to the volunteers.”
Buas said he wasn’t opposed to implementing a property tax credit for active volunteers now but wanted some consideration for residency incentives in the future.
“I don’t mind taking this baby step now but I don’t want to end the conversation as far as residency incentives go,” he said.
McGean agreed.
“We can certainly bring that back to you,” he said. “We can talk about it and implement it as part of the FY25 budget or however you’d like to do that … I would really like to incentivize all city employees and not just police and fire, to be honest.”
Council President Matt James questioned who would be considered an active volunteer firefighter. McGean said it would be volunteers who met the requirements defined by the fire company.
A motion was then made to apply the property tax credit to active volunteer firefighters and direct staff to present options for an employee residency stipend within the next 90 days. Mayor Rick Meehan, however, questioned if the tax credit should be incorporated into a memorandum of understanding (MOU) being negotiated between the town and the volunteer fire company.
“I think there’s a pending MOU,” he said. “I really think that this should be part of the MOU. If it’s approved in the MOU, then move it to ordinance form. I think it’s part and parcel to that.”
Meehan said he also thought the tax credit should be capped at $2,500, and that some credit should be applied to all city employees at a future date.
“But I think it should be for property owners rather than someone who just resides here,” he said.
Buas then amended the motion to make the property tax credit contingent on the execution of the MOU between the town and the volunteer fire company. Councilman John Gehrig questioned when the MOU would be completed.
“Without this conversation, it would have been to the city manager this afternoon,” City Solicitor Heather Stansbury replied. “But certainly, if that’s what you all want to do, I can revise it this evening or tomorrow morning, and get it to the city manager … It will also come back in ordinance form because of the tax implications.”
After further discussion, the council voted 5-0, with James and Councilman Will Savage abstaining, to apply the tax credit to active volunteer firefighters, contingent on the execution of an MOU, and to direct staff to bring back a stipend plan that would apply to all city employees
“I support this but I may benefit from this down the road,” James said. “So I’m going to abstain.”
