Ocean City Today

Ocean City fiscal ‘19 budget season preview; no tax hikes

By Greg Ellison | Apr 12, 2018
Photo by: Greg Ellison City Manager Doug Miller and Budget Manager Jennie Knapp presented a preview of the fiscal 2019 budget to the mayor and City Council on Tuesday.

(April 13, 2018) Ocean City government’s budget season got underway at Tuesday’s City Council work session with City Manager Doug Miller’s preview of fiscal 2019 revenue and expenditure estimates.

Miller said despite financial hurdles, such as a slight decline in real property assessments from the state, the next year’s $127.2 million budget calls for no increase in taxes.

“We do have a balanced budget at the same tax rate as FY18,” he said.

Miller said budget preparations began last fall when department heads submitted funding requests.

“We told them to keep their budget at status quo, but at the same time we wanted them to identify their needs honestly,” he said.

With the assistance of Budget Manager Jennie Knapp, Miller said the requests were thoroughly vetted.

She scrubbed … and boiled down budgets,” he said. “She made department heads justify what they were asking for.”

Knapp said yearly budgets must have total anticipated revenues and expenditures match.

“Each budget presents unique circumstances [and] there are changes in law each year,” she said. “This year what affected our budget was an increase in minimum wage mandated by the state and an enactment of sick time leave for part-time employees.”

The budget is comprised of several funds: general, enterprise, internal service and fiduciary funds, Knapp said. The general fund budget, which gets most of the attention because that’s where property taxes go, is slightly more than $85 million in the proposed fiscal package for the new year.

“Real property tax revenue provides 48 percent of … the general fund,” Knapp said. “The other 52 percent is from room taxes, charges for services, and funding from other agencies.”

The general fund covers the cost of most city departments, including police, fire, public works and recreation, while the enterprise funds cover water and waste water and other services whose costs are covered by user fees.

Because the proposed general fund budget is up just $645,503 from last year, no increase in the tax rate is required to cover it, Miller said. As it happens, last year’s rate of .4656 cents per hundred dollars of assessed value is marginally less than the state-calculated constant yield rate of .4667.

As it is, assuming the city holds fast with last year’s tax rate, that will generate $40.8 million in revenue for the general fund. For the sake of perspective, the difference in dollars generated between the current tax rate and the constant yield rate is almost negligible — $11 in on a million-dollar property.

Miller’s preview and stable tax rate message indicates that the two weeks of departmental budget meetings that got underway this week will be calm affairs, since everything seems already to be in place.

“We can talk about an issue or need all we want, if we don’t include it in the budget it doesn’t get done,” he said.

The final approval vote on the budget will be in June.

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