Ocean City Property Owners Put Tax Cap Amendment on the Ballot, Special to TBN/MTA Joe Coleman, Common Cause Coalition, 8-27-04

Special to TBN/Taxpayer Breaking News
Maryland Taxpayers Association

Ocean City Property Owners Put Tax Cap Amendment on the Ballot

Joe Coleman
President, Common Cause Coalition

August 27, 2004

Ocean City property owners have successfully petitioned to put a tax cap amendment to the city charter before the voters on the October 19, 2004 ballot. The cap would limit increases to 2 cents above the constant yield tax rate per year per year.

The movement to limit the rise in tax rates was spurred by a January 2003 jump in Ocean City Properties by Maryland State assessments averaging 70 percent. The increase in assessed value for Ocean City’s 28,000 properties would have brought a total of $24 million in additional property taxes for the city over the three-year period of FY2004-FY2007, if the property tax rate did not decrease.

An ad hoc group of Ocean City citizens repeatedly went to city hall in 2003 and 2004 and asked, pleaded, and begged for lowering the FY2003 tax rates (set at 51.6 cents per $100 property value) that would still bring in 10 percent more revenue increases for FY2004.

The City Council ignored these pleas, enacting in June 2003 a property tax rate of 51 cents per $100, which would generate 19 percent more property tax revenue than in FY2003.

The Common Cause Coalition, a 501(c)3 educational corporation, was formed October 1, 2003, to inform voters of FY04 property tax hikes and caution on expected FY2005 tax revenue increases.

Nevertheless, the City Council in June 2004 enacted a FY2005 tax rate of 48 cents per $100, which will generate an additional 12 percent in property tax revenue over FY2004.

In July 2004, the ad hoc group outside of the 501(c)3 group launched a petition drive to revise the Ocean City municipal charter for a property tax rate cap of 2 cents above the constant yield tax rate each year. This formula should generate a modest increase of about 5 percent additional property tax revenues per year per year.

The exact language of the petition:

CHARTER AMENDMENT REFERENDUM 2004

SUBJECT: Amendment to Ocean City Charter to provide for a limit on the real property tax rate that the council shall set in the adoption of the annual budget.

C-712. Budget authorizes levy.

From the effective date of the budget, the amount stated therein as the amount to be raised by the property tax shall constitute a determination of the amount of the tax levy in the corresponding tax year. Effective July 1, 2005, and thenceforth on, the real property tax rate shall not exceed two cents above the constant yield tax rate as established annually by the Maryland State Department of Assessments and Taxation. This maximum tax rate increase shall only be changed by a majority of voters voting on a future charter amendment.

The ad hoc group collected well over the 1,200 signatures required by the city charter to put the amendment on the October 19th 2004 ballot for voter approval. In fact, 1,500 signatures were collected over two weeks and submitted to city hall..

Currently we estimate that 90 percent of the registered voters who actually vote will approve this amendment.

Joe Coleman can be reached at (410) 250-7896 or by email through betty.atthebay@verizon.net.