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Constant Yield Reduction Debated
OCEAN CITY -Residents of Ocean City turned out to a public hearing Monday night to discuss the constant yield tax rate in Ocean City, with several residents complaining about rising property taxes.
According to town officials, starting July 1, the estimated real property assessable tax base will increase in Ocean City by 15.5 percent, rising from $10.2 billion to $11.7 billion.
Currently the constant yield tax rate in Ocean City is maintained at a rate of 41-cents per $100 of assessment. The constant yield tax rate is used to ensure that the town brings in the same amount of revenue as the year before. The rate is either lowered or raised in an effort to maintain that same revenue.
According to town officials, if the town maintains that tax rate of 41-cents, real property tax revenues will increase by 15.5 percent, resulting in $6.5 million in new real property tax revenues. To offset that, the current tax rate would have to be lowered to 35-cents to produce the same revenue.
'The Town of Ocean City is considering not reducing its real property tax rate enough to fully offset increasing assessments. The Town proposes to adopt a real property tax rate of $.395 per $100 of assessment. This tax rate is 11.3 percent higher than the constant yield tax rate and will generate $4,712,001 in additional property tax revenues,' reads the town notice.
Several residents spoke at Monday's public hearing, voicing concerns over the ever-increasing property taxes.
West Ocean City resident John Collins, who owns and rents out properties in Ocean City, pointed out the significant spike in property taxes over the past three years. 'We just can't raise our rates with these families that have been coming here all these years,' he said, pointing out that many families have been renting from them for 27 years.
'We're not making any money at all, we're just up there satisfying our clientele,' said Collins, questioning how property owners are supposed to absorb rising taxes.
'It's getting too expensive here, you have a responsibility to fight the state government,' said local resident Jim McGinniss. McGinniss pointed out the effects that rising property taxes are having on the town, noting the high costs of dining out in Ocean City. 'My friends are going to West Ocean City, to Ocean Pines and to Delaware, it's getting too expensive.'
Carol Krimm questioned how potential tax credits for the Trimper and Jenkins amusement park properties would affect her taxes.
'At this point in time there's been no discussion about that request,' said Mayor Rick Meehan, pointing out that the amusement park tax credits were not included anywhere in the FY09 budget.