City Council Introduces Budget, Hears Criticism From Residents

City Council on Thursday night unanimously introduced Ocean City’s proposed 2025 municipal budget amid complaints from a few local residents about higher spending and taxes.

Unless the budget is cut by Council before its final approval, homeowners are facing a 7 percent increase in the local tax rate. A public hearing and final vote on the $112.5 million spending plan are scheduled for the May 8 Council meeting.

The budget includes a 3.7-cent tax hike that would add an extra $242 annually on the local tax bill for the average Ocean City home assessed at $645,000, said Frank Donato, the city’s chief financial officer.

Altogether, the annual local tax bill for a $645,000 home would be $3,687. School and county taxes are separate from the local tax bill.

The full budget breakdown is available to the public here.

Council and Mayor Jay Gillian's administration will collaborate on the budget before a final vote is taken. As it scrutinizes the budget, Council has the power to make spending cuts or other revisions if it wants to pursue that option.

Although Council introduced the budget by a 7-0 vote, two members of the governing body indicated that they may consider making changes before final approval.

Councilman Dave Winslow said he is “working on a few things staffing-wise,” but did not elaborate.

Councilman Keith Hartzell expressed concerns about the proposed tax increase and how it would affect senior citizens living on fixed incomes.

“I do worry about that,” Hartzell said of higher taxes. “I think some of our senior citizens do have a very hard time.”

    Mayor Jay Gillian, seated next to City Solicitor Dorothy McCrosson, comes under fire for the proposed tax increase.
  

Three local residents strongly criticized the proposed tax hike in public remarks to Council, with each of them calling for spending cuts.

One of them, Dave Hayes, leveled his criticism directly at Gillian, denouncing the mayor for three straight years of local tax increases totaling nearly 17 percent.

Hayes asserted that Gillian has been quick to claim credit for providing more city services to senior citizens, veterans and young families, but is “doing his best to drive them out” of town by raising taxes.

“We call Ocean City ‘America’s Greatest Family Resort, but are we willing to do what it takes to keep everyone here, including seniors, veterans and families? I call on the city to work with Council to stop taxing the lifeblood of Ocean City right out of town,” Hayes said.

In similar comments, Ocean City resident Kathleen Miller said she fears that senior citizens will be priced out of their homes by higher property taxes. Miller urged Council to consider reducing the tax hike, but later expressed little confidence that will actually happen.

“They’ll go ahead and do it anyhow. It’s ridiculous,” Miller said after the meeting about her belief that Council will approve the tax increase.

Dave Breeden, president of Fairness In Taxes, a local government watchdog group, denounced what he called the mayor’s “misguided efforts” to oversee the city’s budget spending.

Breeden criticized Gillian for what he called the mayor’s “tax-and-spend practices.” He also slammed the city’s “skyrocketing personnel costs.”

    Local resident Dave Hayes criticizes the proposed budget and tax increase during remarks to Council.
  

City Council should implement a hiring freeze, with some exceptions for the city’s police and fire departments and summer employees, to help rein in spending on municipal salaries, Breeden said.

Breeden continued his criticism of the proposed budget by contending that the city does not have a revenue problem that would force it to raise taxes.

“However, what is equally as important is an examination of larger financial trends, future projections and the overall business practices of the city. Beyond the obvious immediate adverse impact of the budget on taxpayers, a global question that must be addressed: Is the mayor managing the city in a business-like fashion, along with having sincere appreciation of the taxpayer dollar? Unfortunately, the answer is painfully no,” Breeden said.

After the meeting, Breeden and Gillian appeared to be friendly with each other while talking privately.

“We’re friendly. That’s what I love about democracy,” Gillian said about Breeden’s right to speak his mind about the budget and higher taxes.

Gillian referred other questions about the budget, including the criticism from other residents, to Donato.

Donato said 2025 is shaping up to be “an extraordinary time” for rising costs in the budget.

During a budget presentation last month, Donato explained to Council that higher costs for municipal salaries, pensions, healthcare, trash collection, utilities and debt service are some of the main reasons why the 2025 spending plan will go up.

In an interview after Thursday’s Council meeting, Donato emphasized that the 2025 budget will continue to fund all of the city services and activities that residents and visitors “have come to expect” every year.

“We’re committed to keeping the town clean, safe and family-friendly. This budget accomplishes that,” he said.

Donato explained in his presentation in March that the city benefits by having an array of revenue sources to help fund the budget, in addition to the tax levy paid by local property owners.

    Vacationers line up to purchase beach tags, a key source of Ocean City's budget revenue.
  

Beach tag sales, parking charges, municipal fees and permits, investment income and state grants are some of the big sources of revenue that finance the budget, he pointed out.

In other business Thursday, Council gave final approval to a new ordinance that limits where cellphone towers and antennas may be located in Ocean City.

Under the ordinance, cellphone towers will only be allowed on public property owned, leased or otherwise controlled by the city. The city would have to give its consent before any cellphone towers are built on public land.

Cellphone towers and antennas would be prohibited from being built on private property.

Council and Gillian’s administration have been trying for months to come up with a plan to try to minimize the impact that cellphone towers would have on the public.

For the past few years, local homeowners have voiced concerns about the visual blight and possible health effects of having cellphone towers being too close to residential neighborhoods.

In 2023, Verizon Wireless sought approval from Ocean City’s planning board to locate wireless antennas on the roof of a two-story Compass real estate building at 3337-39 Haven Ave. amid strong opposition from neighboring homeowners.

The planning board rejected the plan by Verizon Wireless, which in turn sued the city to overturn the decision.

In a separate vote, Council approved a settlement in the Verizon Wireless litigation that would allow the company to build a 120-foot-high cellphone tower on city property at 3308 Bay Avenue if Verizon Wireless wins a public bid for the project.

    Verizon Wireless had wanted to put wireless antennas on the roof of this real estate building at 3337-39 Haven Ave, pictured in 2023.