At The Beach – Ocean City Maryland

The mix of economic issues looming for Ocean City Md is very REAL! Real Estate Property assessments increased significantly during the “speculation and development” boom a few years ago. This resulted in significant property tax increases for real estate property owners (Both Business properties and residential), creating hardship for local residents and increased operating expenses for business owners and those who have a 2nd home Condo and rent it out. Increased operating expenses require increases in prices to be charged the “visiting vacationers” … pretty well across the board.

This tax increase produced significant increases in revenue for Ocean City MD – in fact, a windfall! How did they spend that money??? Apparently it indeed was committed to more expenditures. Unfortunately, we are now in the midst of and possibly the beginning of future declines in revenue for the City due to the recession and declining real estate property tax revenues. The city now potentially faces a multi-million dollar budget deficit and must cut operating expenses or increase taxes. Let us hope the ENTIRE council puts the brakes on any NEW expenditures of any kind during this period until the economic trend is upward again.

If they increase property taxes AGAIN – the result will allow them to possibly balance their budget, but at the expense of Tourism, Local Residents, Absentee 2nd home property owners and all local Businesses. Let us hope that the entire city council realizes the pending need to reduce expenditures severely, possibly even to furloughing employees and reduction of staff(s). Look what happened to General Motors with the substantial labor costs and benefits they were having to sustain in a competitive market. Now they will ultimately have to cut back employee wages and benefits in order to be competitive or face extinction.

More taxation means businesses and condo rental owners must increase their prices AGAIN. Property Tax increases also would continue to dampen Real Estate Sales. This means that Ocean City MD becomes less affordable for vacationers in a time when they are seeking bargains and good vacation experiences for their reasonable vacation budget. So – The rationale is then (To the City Council) .. don’t increase property taxes – but rather “GET REAL” and put away your now slim city wallet and go on a serious diet! .. To even think about 5 million for a renovated Arts Center is insane in this economic climate! A renovated Arts center surely will cost MUCH MORE than it’s proponents say it’s economic benefits will be. It’s unfortunate that a vast majority of Ocean City MD property owners are absentee and have no voting rights or representation. Possibly the balance of representation would then put absentee property owners on an equal representation basis with the overly tourist minded council members elected by local interests.

The City Manager and Council need to scrutinize every city department for expense cuts – wages, benefits, inefficiency, needless overtime, etc.. – There are certainly many unneeded expenses, overstaffing or methods of operation which need to be reviewed and changed, so as to become more efficient resulting in and at a lower cost(s)! Certainly the wages and benefits paid to our city employees are OVER THE TOP! The State of Maryland just mandated a 5 day furlough for it’s employees covering the next few months (without pay) .. Ocean City MD may have to seriously think of similar cost saving means.

Worcester County MD appears to have gone on a strict diet and realizes that this is essential to maintain a budget without increased taxation. Even the purchase of a new lawnmower is deemed unnecessary during these stressful times. In September 2008, all County departments were asked to put aside their current operating budgets to be used next year. Since then, the Worcester county commissioners have announced next year’s budget will be 3 percent less than this year and have enforced a hiring freeze and denied any salary increases.

I often wonder what our full time city employees do during the winter? There is virtually nothing going on! During the summer it’s certainly understandable when the Town of Ocean City Maryland is full of vacationers that a full compliment of services and staff are necessary. Many local private businesses in Ocean City MD are struggling – They must layoff or simply let go employees when the lack of customers no longer require them to service needs. Those that own condos and rent them out depend on that rental income. It forces them also to try to recover that extra expense with increased rental rates. To even think about an increase in property taxes would have a negative effect. It’s TIME for the Town Of Ocean City Md to get out the “carving knife” and continue to trim the FAT!

UPDATE: Jan 26th, 2009 – Ocean City Maryland Town Council Meeting
The Council and City Manager continue the huge task of cutting expenses while staying trying to stay away from any thoughts of raising taxes or reducing services. This is a challenging task!

City revenue forecast does not look positive but rather indicates significant decreases in revenue in the current and future years! Let us pray and hope that city employee wages and benefit costs are scrutinized and adjusted to balance the budget! Taxpayers have already been burdened by huge tax increases over the past few years .. We hope that the City does not consider raising taxes as an option!

It should be noted that MANY towns, cities and communities in the USA are facing similar decisions. It is indeed a challenging time to serve as a public elected official for sure. We surely appreciate their time, effort and visions. Public input however is essential for elected town or city officials to hear and visualize others viewpoints and concerns.

UPDATE: FEB 15, 2009
HEADS UP to TAXPAYERS OF OCEAN CITY MARYLAND
The most recent Ocean City MD council meetings suggest that additional expense reductions are being made. It is evident that there is more “fat” to be cut from the city budget to balance it for the 2009 year. City Employees and the Fraternal Order of Police and Fire Depts hae apparently elected to forego their Cost of Living Increases also.

Unfortunately, in my opinion, with the future looking like tax revenues will likely continue to decline in the coming few years, more hatchet work will be necessary. Tax rates cannot be increased as they are already causing a detrimental effect on other facets of the local economy and of home / property / business property ownership in Ocean City MD. Our city, fire and police wages and benefits package is EXTREMELY HIGH already and composes a major percentage of the total budget. The city wage and benefits structure sort of resembles circumstances faced by General Motors. Huge wage costs and benefits and dwindling revenues!!!!!! Annual adjustments and retirement benefits will continue to cause upward increases in costs to the city to efficiently serve the taxpayers. How did this happen??? Why ??? What can be done to “retract” and reduce city wage and benefits packages?? Here is an interesting article published Jan 22, 2009 in FORBES MAGAZINE about PUBLIC SECTOR WAGES compared to private sector and the cause and effect of HIGH PUBLIC SECTOR WAGES! This link provides relative information relating to wages and benefits across the USA for CITY MANAGERS. “city managers salary survey”

And LAST but not LEAST . a link to another FORBES ARTICLE “When City Hall Goes BUST! —— Could this happen to Ocean City Md in 5 years?

Stay Tuned!!!

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Should you travel to Ocean City Maryland for a weekend get-a-way – you will find the Best Ocean City MD Hotel Rates here! ( Guaranteed )

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Cheers ! Here is to a Healthy and we hope Prosperous New Year 2009.