45 °F Ocean City, US
November 21, 2024

Budget has 2.2-cent tax increase

Does not include federal infusion of $7 million

By DAVID NAHAN/Sentinel staff

OCEAN CITY – In Mayor Jay Gillian’s proposed 2021 budget, revenues are expected to rise more than $5.6 million with spending increasing along with it.

The proposed tax rate is 48.31 cents per $100 of assessed valuation, a 2.2-cent increase of the current rate of 46.1 cents.

That is a jump of about $110 annually on a home assessed at $500,000.

What is not included on the revenue side of the budget is an anticipated $7 million from the federal government under its $1.9 trillion COVID relief act signed into law by President Joe Biden. The act provides some $350 billion in aid to states and local governments.

Gillian’s budget proposes $87,416,453 in spending with revenue to offset that. Last year’s budget was $81,749,482.

The proposed budget uses $3.5 million from the surplus, compared to $4 million in the 2020 budget, and getting an additional $3.66 million from the local purpose tax compared to 2020.

The local purpose tax levy in 2020 was $54,892,721. In the proposed 2021 budget it is $58,560,730.

That is offset in part by a growing tax base, which has climbed to $12.12 billion from $11.93 billion in 2020, an increase of $189.4 million.

The city had a record budget surplus of more than $8 million for 2020, but that is down $1.45 million in 2021. After using the $3.5 million for the 2021 budget, it would leave a balance of more than $3 million in surplus funds.

As usual in municipal budgets, salaries and wages account for the largest item in spending, amounting to $32,617,200, a hike of $1,157,500 from 2020.

The city’s debt service would climb $1.675 million to $16,717.445.

On the anticipated revenue side of the budget, beach tag fees are at $3.8 million for 2021 versus $3.7 million for 2020 and Aquatic and Fitness Center fees are $400,000 versus $700,000 in 2020.

This is the first step in the budget process. Ocean City Finance Director Frank Donato is expected to make a formal presentation of the budget with details at the March 25 City Council meeting. The budget has to be introduced by council and a public hearing set before it can be adopted.

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