City Council on Thursday introduced a 2014 municipal budget that calls for a 2.57 percent increase to local taxpayers.
A vote on a final budget will be held after a public hearing on April 24.
The owner of a (not-quite-median) $500,000 home in Ocean City would see an increase of $73 in municipal taxes this year if the budget were approved as is.
That figure represents a small decrease from the 2.89 percent tax levy increase proposed in a preliminary budget released last month.
While the city had to budget about an extra $25,ooo to cover overtime work during an exceptionally snowy winter and an extra $155,000 to cover expenses on a front-loaded five-year capital improvement plan, substantial savings on required pension contributions helped reduce the overall burden on taxpayers.
The overall budget falls from $71.9 million in 2013 to $69.7 million in 2014, but the decrease comes from one-time items (such as a FEMA reimbursement in 2013) and not from a reduction in annual operating expenses.
The municipal budget and a small library tax account for about 50 percent of a property owner’s tax bill. School taxes (
see related story) and county taxes represent about 25 percent apiece.
With 4,500 homes reassessed in the final stage of a multiyear program to bring assessed values in line with market values, Ocean City has about $135 million less property value to tax.
That helped lead to a 3.8 percent increase in the tax rate to 40.06 cents on $100 of assessed value.
The owner of a $500,000 home that was one of 4,500 that were reassessed by the city this year will likely pay less in taxes this year. On average, that home would be reassessed at about $40,000 less, and the owner would see a decrease of about $85 in municipal taxes.
With a three-year, in-house program to reassess 17,000 properties in Ocean City now complete, tax rates should begin to stabilize, according to Finance Director Frank Donato.
While the local tax levy increases by 2.57 percent to $44.8 million, Ocean City will be $432,000 under the state's 2 percent tax levy cap, according to Donato. The tax cap formula includes exceptions in what is calculated.
City Council voted unanimously to bank money from this year to establish a cap bank for the next two budget cycles.
See more detail on the proposed Ocean City budget.
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