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Tax Burden Shifts as Ocean City Catches Up With Falling Real Estate Values

The proposed tax rate increases by more than 8 percent as the ratable base decreases by $848 million.

The majority of the owners of Ocean City's approximately 19,000 taxable properties will see a municipal tax increase of more than 8 percent this year under a proposed budget.

That's not because the city is spending that much more — the city will ask only 1 percent more of local taxpayers under the draft budget presented at a City Council workshop on Wednesday (Feb. 20) at the Ocean City Free Public Library.

It's because many owners will see tax decreases, likely among the ranks of the following:

  • The more than 800 owners who filed successful tax appeals in 2012, reducing the collective value of their properties by $108 million.
  • The thousands of owners whose properties were reassessed in a pro-active project by the city to get assessed values in line with market values. The 2013 "compliance plan" reduced combined Ocean City property values by $782 million.
  • The owners whose homes were reassessed base on Superstorm Sandy damage (at a collective $15.5 million).

The total combined value of Ocean City's taxable property (ratable base) fell by $847,631,052 in one year and now stands at about $11.3 billion. With less property value to tax, the proposed tax rate went up by 2.96 cents, an 8.315 percent increase.

That means the owner of a $500,000 home (not quite the median in Ocean City) will pay an extra $148 in municipal taxes next year under the proposed budget, if the owner's property is assessed at the same value it was last year. Each penny increase on the tax rate represents $10 more in taxes per $100,000 of property.

"It is the responsible thing to do," Business Administrator Mike Dattilo said of Ocean City's compliance plan to get assessed values to reflect market values more closely. "And it's fairer to the property owners."

The compliance plan started last year in areas where assessed values were farthest from market values — including high-end properties on the beach and bay, and also some of the low-end "condotels" (motels converted as condos), Finance Director Frank Donato said at the time. It continued this year with thousands of other properties with assessed values out of line with the market.

Dattilo said last week that with the majority of the compliance plan complete, the ratable base will begin to stabilize for future budgets. 

The tax rate will be the end result of a budget process that continues into the spring, when City Council will approve a final version.

Mayor Jay Gillian's administration delivered a draft budget on Feb. 14 that asks local taxpayers for just 1 percent more in 2013 than in 2012.

The proposed budget of $70,957,959 represents a $2.2 million (or 3.27 percent) increase over last year's $68.7 million budget. But because projected local revenue (largely from parking fees, Sandy reimbursements and a capital fund) increases by $2 million, the draft budget increases the tax levy ($43.7 million for 2013) by just $440,390.

The parking fee increases are based on a proposed rate increase for an expanded zone of credit-card meters (where parking would be 25 cents for 10 minutes).

See the full proposed 2013 budget on the City of Ocean City Finance Department page or click on the attached PDF.

City Council's work on the proposed budget will continue with a public workshop at 5 p.m. Thursday (Feb. 21) at the Ocean City Free Public Library.

Eric Sauder February 26, 2013 at 03:13 AM
Yeah I know council appoints the board. I was using the term "administration" loosely. They went tor training seminars, I think for a week at a time on occassion. My advice to you (not that you asked) is to cut the personal attacks and stick to the issues. You'll be more effective if you do. You're not attacking me now but you're attacking Archie. Really I feel the same way he does ....we were hopeful of good results but disappointed in the reality. I think an Ethics Commision COULD work, but the one we have is a reflection of this City. Rocky was a rotty and the kindest and noblest soul I ever knew. He loved the ocean (water anywhere he could find it) and learned how to judge the surf. He'd bound out when the wave action was diminished and swim around. When he got tired he'd catch a wave. All you could see was his nose on the creast of a wave. People used to stop along the beach and watch him.
DockedinOC February 26, 2013 at 03:23 AM
Huhhh?
DockedinOC February 26, 2013 at 03:26 AM
Missed the personal attacks. And sticking to the point - even your own - is not your thing, Eric, to make a (retaliatory) personal attack.
Eric Sauder February 26, 2013 at 12:04 PM
That wasn't intended. Peace.
Jan Thomas March 29, 2013 at 05:13 AM
Eric, OCPD's staff definitely should be seriously reduced. For one straight year, and yes I have all of my written copies and notes, literally witnessed officers sitting around on the job in the parking lot behind the Strand Theatre. I would call every single morning, ask for the Sgt. on Duty, explain that his officers have been sitting out here, different days different times, anywhere from 45 minutes to 2 hours and 45 minutes. They would meet up in the morning and sit in the parking lot just shutting the breeze. Now that the parking lot has been re-structured, I'm more than sure they are just sitting someplace else. I sent letters to the Mayor, copy to all city council, called city council, and absolutely NOTHING was ever done about it. Two cops would show up first thing in the morning after signing in and sit in their cars in the parking lot, shooting the breeze, drinking their coffee, etc. I was even lied to by a Sgt. He got caught up in his own lie and couldn't get out. Yet, the former Mayor, and all city council were aware that this problem existed every single day. Nothing, I repeat, was ever done about it. So, there's your police force, going on duty and meeting up with their buddies. One officer, I went up behind his car and screamed his car number out really loud, never even knew I was there (less than 4 feet away). I guess he was sound asleep. Called the Sgt. on duty. One was seen throwing trash out of his car onto private property. Nothing done.

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