OCEAN CITY — Ocean City Council voted April 10 to introduce the 2025-26 municipal budget with its 7.04 percent tax rate increase despite public comment in opposition to it.
The $112 million spending plan would increase the tax rate by 3.76 cents per $100 of assessed valuation. The spending and revenue sides were decreased by about $12 million from Chief Financial Officer Frank Donato’s budget presentation in March, but that reflected grants that were removed from both the revenue and appropriation sides of the budget.
The initial budget showed $124.6 million in spending and appropriations. The new version changed that to $112.5 million in both, a reduction of about $6.6 million from the current budget year.
That change, however, did not impact the proposed tax levy, which remains at $74 million, compared to $68.2 million in the current year. If this budget is approved, the local rate would increase 3.76 cents from 53.4 cents to 57.16 cents per $100.
Donato said the introduction of the budget kicks off the statutory process. It must be advertised for a minimum of 28 days and would be back for adoption and public hearing on May 8.
He credited council members for looking into all the departments and asking good questions. Responding to a statement made during public comment about a revaluation coming to the resort, he explained that a reval does not result in a tax increase. Instead, it redistributes the tax levy among the 19,000 properties on the island based on each of their new assessments.
During public comment, property owner Kathy Miller said she hoped for a more sunny day picture of the budget that would lower the tax rate.
Resident Dave Hayes said he was disappointed in Mayor Jay Gillian’s comments during his March State of the City address noting how much residents get for the additional 66 cents more a day the tax hike would represent for the average homeowner.
He said there was a 7 percent tax increase in this year’s budget and about 3 percent the year before. Together with the proposed 7 percent tax increase it would mean Ocean City government was raising taxes 17 percent over three years.
Hayes said the mayor boasted about expanding the services at the Senior Center since taking it over from the county, but what good does it do if seniors can’t afford to live in the city?
He said the same thing about Gillian taking credit for helping veterans and young families and about having one of the few city-sponsored orchestras, but asked who would be around to enjoy the benefits of the city because of the increased costs.
Hayes pointed out Leonard Desiderio, director of the Cape May County Board of County Commissioners, has maintained services while cutting taxes for three years straight. Desiderio, he said, made hard decisions.
He said Ocean City is called America’s Greatest Family Resort, but asked if is it willing to do what it takes to keep everyone here including seniors, veterans and families. Hayes called on the mayor to stop taxing the lifeblood out of the resort.
David Breeden, president of the Ocean City Fairness in Taxes group, criticized the mayor and his budget on multiple fronts. Under the Faulkner Act, the mayor is charged with daily operation of the city so council is “severely restricted” in its ability to make meaningful revisions to the budget. He said that is even though the mayor tries to shift the responsibility “or blame” for the budget and its tax hike to council. That, he said, is “politically savvy, but genuinely insincere.”
He said the only meaningful way to cut expenses is by reducing personnel, although he said that shouldn’t apply to public safety — the police and fire departments.
“Our public safety services are the gold standard and should not be compromised as a result of the mayor’s misguided efforts,” he said.
Breeden called for a hiring freeze and having the mayor commit to quarterly reports about personnel to council, including staffing levels, promotions and job reclassifications. He also said it was time to “rip the Band-Aid off” and adopt a nepotism policy. He said it wouldn’t help the current budget because the “damage is already done, but it sends a clear and powerful message to the mayor of his questionable and costly hiring practices. The current list of municipal employees is rather interesting and warrants such action to prevent further abuses.” (Breeden submitted his full comments in a letter to the editor in this week’s Sentinel.)
During discussion about the budget introduction resolution, Fourth Ward Councilman Dave Winslow asked if council still had the option to make changes on the staffing side if needed.
Donato explained they can make changes up to a certain limit before they would need to re-advertise the budget, adding an additional meeting for adoption. He said no line item could be changed more than 10 percent without triggering that meeting.
When Winslow asked if staffing were a single line item, Donato gave the example of the police department with its $8 million budget. “If you adjust the police more than $800,000 you’d have to come back and re-advertise it.” Winslow said that wasn’t where he was going with it.
Second Ward Councilman Keith Hartzell said he worried about the senior citizens who would have a hard time with the tax increase and that 17 percent over three years “is a lot.” Hartzell said he was concerned “for the long haul” and would look at the budget for suggestions, but noted they had to move “the mayor’s budget” forward.
Donato said senior citizens concerned about the tax hikes should contact the city’s tax collector because there is a senior tax freeze program in New Jersey based on their level of income. He said the tax collector would be happy to talk to anyone about it.
Council voted 7-0 to introduce the budget.
– By DAVID NAHAN/Sentinel staff
