Ocean City Today
https://oceancitytoday.villagesoup.com/p/1721762

No huge windfall via tax differential

EDITORIAL
Feb 01, 2018

 

 

printed 07/07/2018

 

The continuing battle between the Ocean City and Worcester County governments over the resort’s demand for a property tax differential might be a monumental thing to them, but it doesn’t involve life-altering circumstances for the average homeowner or small business in either jurisdiction.

The results might be irritating to mainland property owners and only mildly gratifying for the average property owner in the resort, but a tax set-off to compensate Ocean City taxpayers for county services they don’t use and a corresponding increase in the mainland tax rate wouldn’t involve huge amounts of money for taxpaying individuals.

The big winner if local government succeeds would be local government, while the principle losers would be the county commissioners, who must explain to their constituents why their taxes are going up.

Meanwhile, the average taxpayer would see in his or her annual tax bill of no more than few hundred dollars. If, for instance, a single-family home in Ocean City is assessed on $400,000 and the county tax rate on resort properties is cut by 10 cents, the savings for the homeowner would be $400. That, to put it in perspective, is not enough for a cup of coffee a day in most places.

Further, that assumes the unlikelihood that Ocean City taxpayers would benefit from the entire county tax reduction and that the city didn’t take a piece of that pie by raising the municipal tax rate a few pennies.

Here’s how it worked in Frederick five years ago: the county lowered the tax rate for city property owners by 12 cents to offset the cost of  duplicate services. The City of Frederick, however, raised the local rate by eight cents, thus resulting in a net tax savings for property owners of four cents per hundred dollars of assessed value. On a $400,000 home, that would be $160.

Resort government could do the same thing — pull in a few more million in revenue by raising its rate, but leaving enough of the differential to give taxpayers a reduced overall bill.

For years, Ocean City officials have longed for more revenue, but couldn’t find a politically palatable way to get it. The tax differential would give them that and that’s why it’s a big deal to them and their counterparts in county government, but not so much to anyone else.

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