Bills Call For Extending Local Food, Beverage Tax

OCEAN CITY -- A pair of bills introduced in the General Assembly last week would, if approved, extend the special food and beverage tax levied in Ocean City for the life of the current Roland E. Powell Convention Center expansion project.

Senate Bill 990, introduced by Sen. Jim Mathias last week and cross-filed in the House by Delegates Norm Conway and Mike McDermott, would, among other things, extend the portion of the food and beverage tax dedicated to cover the cost of the Convention Center expansion for the life of the current expansion project including the next phase that features a new performing arts center. For years, there has been an additional one-cent per $1 tacked on to the sales tax rate in Ocean City to help pay the town’s portion of the last expansion more than a decade ago.

Currently, the convention center is undergoing a 32,000-square-foot expansion including a 1,200-seat performing arts center. The town and its partner, the Maryland Stadium Authority (MSA) has bonded much of the estimated $9.3 million project. The supplementary sales tax is set to expire in 2015, but the bill would extend the provision through the current expansion of the convention center. In short, the legislation introduced in the General Assembly last week would extend the dedicated food and beverage tax for the life of the new loans.

“There are really two parts to these bills,” said Mathias this week. “The first part essentially sets the stage to allow the competitive arts piece on the convention center to be built. Originally, the food and beverage tax was tied to the dedicated revenue bonds, but this bill would change the language to include all ‘outstanding’ bonds related to the convention center expansion. If they need to borrow more, the food and beverage tax would be extended for the life of the bond.”

The bill would also help solidify the town’s partnership with the Maryland Stadium Authority on the convention center expansion going forward and continue to ensure the matching funds relationship the town enjoys with the state.

“The second part basically keeps the state in as a 50-percent partner in the convention center,” he said. “There is a private sector component to this, but the Maryland Stadium Authority remains a partner and this bill would retain that. Right now, they’re looking for an additional $7 million contribution from the state and this bill helps ensure the state remains a 50-percent partner in the project.”