Mainland residents of Worcester County should pay close attention to the tax differential discussions that will take place, again, this fall and winter between the Town of Ocean City and the Worcester County Commissioners.
In essence, the differential, which Ocean City has been seeking for years, involves reducing the county property tax rate for Ocean City taxpayers to reflect county services they pay for with their tax dollars, but don’t use because resort government also provides them.
One example of this duplication of services would be parks and recreation. Although the county’s facilities are available to everyone, Ocean City has its own and residents rarely cross the bay to use what the county provides.
A part of Ocean City officials’ push for the split tax rate is their pledge to take their request for a differential to the General Assembly if the county doesn’t accede to their wishes.
Either way, the problem for mainland residents is that they will have to make up whatever tax break Ocean City might receive, assuming there’s no adjustment in the county budget.
More than anything else, that could pose problems with the school budget in a county that receives less state funding for schools than most, if not all, other counties.
That’s because the main factor in the state’s school funding formula is local tax dollars raised per capita, a number that is seriously skewed by the resort’s huge tax base, which is driven by nonresident property owners.
In reality, this nonresident source of income obscures just how poor some areas of Worcester are and, were Ocean City to receive a significant tax break, how difficult it would be for the rest of Worcester to fund the school system at its current levels without creating a serious burden on mainland taxpayers.
As a result, any tax differential agreed to by these two governments would require an adjustment, or special exception, in the school funding formula that reflects the mainland’s loss of a large portion of this nonresident tax revenue.
Residents, their governments and the Board of Education need to begin that discussion now in the event that Ocean City appeals to the legislature in January.