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Cut in Tax Rate on the Way From School Budget

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Ocean City High School

The Ocean City Board of Education on Wednesday adopted a preliminary 2015-16 budget that asks for exactly same amount of money from local taxpayers — $21,965,332 — that it did in the 2014-15 budget.

But because the total value of taxable real estate increased this year (Ocean City’s ratable base climbed to about $11.3 billion), Ocean City’s tax rate would fall by one-third of a penny under the proposed budget.

The owner of a $500,000 home would expect to pay about $16.54 less in school taxes, if the budget were approved as is.

The board will vote on a final budget on April 29 after a public hearing. With state aid — always the biggest variable late in the budget process — already announced to be flat with last year at $3.8 million, there appears to be little that could have a substantial effect on the preliminary numbers.

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The total proposed budget for 2014-15 is $41,025,294, down from last year’s $43,074,421. The decrease is primarily a function of  less spending on capital projects.

Last year was a “big number” for capital outlay, according to interim Business Administrator Mark Ritter, based on paying the balance of a major HVAC project at Ocean City High School and the bulk of a major renovation at Ocean City Primary School.

Parts of those projects factored into tuition calculations for sending district towns, and the preliminary budget anticipates that Ocean City will collect $12,701,622 in tuition, compared to last year’s $10,970,021.

Salaries and benefits account for about $31.8 million of the overall $41 million budget, and that figure remains flat compared to last year, with planned retirements offsetting contractual increases, according to Ritter.

School Choice Aid also is expected to remain flat at about $2.7 million. There will be no expansion of the program that allows out-of-district students to attend Ocean City schools with the state paying the tuition.

The interim business administrator said he was happy to deliver the news about a budget that calls for no increase to the tax levy, but he warned that his successor might not be so fortunate.

Ritter said he believes very strongly that School Choice aid from the state will decrease over time, if not disappear altogether. At the same time the capital projects that factored into increased sending district tuition will fall away.

“Seventeen-Eighteen (2017-18) has the potential to be a very difficult year,” Ritter said.

The city government recently introduced a municipal budget that calls for only a 1.32 percent increase to the tax rate. City taxes, school taxes and county taxes make up the overall tax bill.