SNOW HILL – Worcester County elected officials approved a reduction in the Ocean City food tax this week, from 1 percent to one-half percent, after very little discussion.
Food tax revenue has been, and will continue to be, used to pay bonded debt related to improvements to the Roland E. Powell Convention Center.
Ocean City recently retired its portion of the $15 million bond from 1996.
“We need to sunset that particular tax or ask that it be continued,” Ocean City’s Mayor Rick Meehan told the County Commissioners Tuesday afternoon.
Currently, a consultant engaged by Ocean City has recommended extensive further improvements to the convention center, including the addition of a 1,200-seat performing arts center.
“They recommended a very large expansion was doable and economically feasible,” Meehan said.
The Ocean City Mayor and Council has chosen a more modest set of changes, including the addition of 20,000 square feet of space at the back of the building on the bayside including the performing arts center.
That area has been underused, despite having an excellent view over the water, according to Meehan.
The $10 million expansion will cost Ocean City about $5 million.
“Half of a percent will certainly help us retire that debt service in about nine years,” said Meehan.
Leighton Moore, owner of Seacrets and a former town councilman, proposed the original 1-percent tax in 1996, and that it should sunset when the bond was paid.
“We do have the backing of the community. We have the need as shown by the consulting firm,” said Moore.
County Commissioner Judy Boggs liked the concept.
“It sounds like an excellent plan, well thought out and very feasible,” said Boggs.
The new, lower food tax rate will take effect on June 1.
Resort businesses are prepared for the changeover, Meehan said.
The County Commissioners also agreed to amend the maximum bond from $15 million to $20 million.
The resort could increase the food tax back to 1 percent if the convention center needs a greater expansion in the coming years.
“My guess is you would need a larger facility in the future,” said Moore.