It's been a couple of months since we last heard about Ocean City's request for a tax differential. As you might recall, the elected officials of Ocean City were requesting a reduction in property taxes for real estate in the city because the town pays for many services that the county would otherwise be providing. It seems only fair, they reasoned, that property taxes in Ocean City should be reduced to reflect that fact.
And they had a point - there are some services that Ocean City provides directly, thus relieving the county from providing them. So, to allow property owners in Ocean City to avoid paying twice for the same services, their county property tax rate should be reduced. Makes sense.
But then Ocean City presented its actual proposal. They wanted a reduction of six cents in the property tax for Ocean City property but, since Ocean City real estate accounts for the majority of the assessed value in Worcester, that would have meant an increase of sixteen cents in the property tax rate for every other property owner in Worcester County to make up the difference.
The town fathers of Ocean City hired a consultant to prepare their case and document where the city residents were paying taxes for services they weren't receiving. But the 'consultant' failed to consult the county financial staff over at Snow Hill and, as a result made numerous mistakes on the analysis. The county financial staff prepared their own analysis (found here) which documented the mistakes in detail and also showed that Ocean City's tax differential request is thirteen times the state average.
It's worth looking at the political aspect of the request. While the majority of real estate value in Worcester County is in Ocean City, the majority of voters are elsewhere. In fact, less than a quarter of county voters reside in Ocean City, so it's no surprise that the County Commissioners haven't gone along with the town's request - that would be political suicide for most.
Ocean City leaders state that, if the county doesn't approve their request, they will seek legislation at the state level to force the county to approve a differential. But again, it doesn't seem they will have the votes to do this. Ordinarily, the General Assembly will only approve legislation affecting a single county or jurisdiction if the delegation from that county approves of it, and it's unlikely that the two delegates and the state senator who represent Worcester are going to go along with this. After all, there aren't a lot of votes in Ocean City.
I suppose that Ocean City could appeal directly to those who own property in Ocean City and live elsewhere in Maryland to pressure their legislators to approve a tax break for their second homes, but in this political climate, I think that's a long shot.
So we'll wait and see how this plays out. One thing for sure, the town's ham-handed initial approach to the county didn't make them any friends and will make it much more difficult to eventually get what they want.
