Proposed 2025 Budget Includes Tax Increase for Ocean City Homeowners

Ocean City homeowners are facing a 7 percent increase in the local tax rate under the proposed 2025 municipal budget discussed in intricate detail Thursday during a City Council meeting.

The increase translates to a 3.7-cent tax hike that will add an extra $242 annually on the local tax bill for the average Ocean City home assessed at $645,000, Frank Donato, the city’s chief financial officer, said during a lengthy budget presentation to Council.

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. It is too early to estimate the total annual bill combining local, school and county taxes because the county has yet to complete its tax rate for 2025, Donato said.

Donato spent more than an hour breaking down the details of the proposed $124.6 million budget to Council. The governing body will now begin scrutinizing the spending plan. Council is expected to introduce the budget at its April 10 meeting and take a final vote on May 8 after holding a public hearing.

“There’s a lot to digest,” Council President Pete Madden said after Donato finished his presentation.

The full budget presentation is available to the public here.

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

In his State of the City address on March 13, Gillian indicated his willingness to work with Council on ways to possibly lessen the impact of the tax increase.

“I want to ask Council to join me in looking for new revenue solutions and other efficiencies, if we want to further reduce the burden on taxpayers,” he said.

    Frank Donato, the city's chief financial officer, makes his budget presentation to Council.
  

Unless the proposed $124.6 million budget is changed, spending will increase by about $5.5 million compared to the $119.1 million budget in 2024. The 2024 budget also included a 3.7-cent increase in the tax rate.

During the public comment portion of the Council meeting, Kathleen Miller, who owns an Ocean City condo, urged city officials to find ways to cut the proposed budget to ease the tax burden on senior citizens living on fixed incomes.

After the meeting Miller said in an interview that she thinks it would be unfair for senior citizens to have to pay higher taxes.

“A 7 percent increase in the tax rate, that is way over the cost of living and unsustainable for people who live here year-round,” she said, referring to senior citizens.

Overall, local property taxes remain relatively low in Ocean City, making the resort town an attractive place for residents to make their homes, Gillian said in his State of the City address.

“It's a dream for people to live in Ocean City. One reason they can move here is because of our relatively low taxes,” he said.

Donato explained during his presentation that higher costs for municipal salaries, pensions, healthcare, trash collection, utilities and debt service are some of the main reasons why the 2025 budget will go up by $5.5 million compared to last year’s spending plan.

    Frank Donato speaks to Ocean City condo owner Kathleen Miller about the budget after the Council meeting.
  

According to Donato, 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.

“We are lucky in Ocean City to have a lot of sources of revenue, especially compared to other towns,” Donato said.

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 along with local taxes.

For instance, Ocean City led all of New Jersey’s shore towns in 2024 with $6.2 million in beach tax revenue. Donato pointed out that beach tag revenue helps the city to maintain the beaches, hire lifeguards and summer police officers and pay for its share of beach replenishment projects in concert with the federal and state governments.

“The money’s well-spent,” he said.

In other business Thursday, Council introduced a new ordinance that would limit where cellphone towers and antennas may be located in Ocean City.

Under the ordinance, cellphone towers would 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.

The ordinance is scheduled for a public hearing and final vote at the April 10 Council meeting.

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

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.

“They’re not the most attractive thing,” Councilman Dave Winslow said of the towers.

In 2023, Verizon Wireless sought approval from Ocean City’s planning board to locate wireless antennas on the roof of a two-story 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 Thursday, 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.