OCEAN CITY – The Ocean City Board of Education unanimously approved the 2026-27 budget April 30 that will raise taxes 5.4 percent and cost the owner of an average-priced home an extra $71.50 per year.
The 1.1-cent tax increase raises the tax rate to 21.5 cents per $100 of assessed valuation in a spending plan that comes in at $49.8 million.
The 2025-26 budget raised taxes 2.5 percent, but that comes after three years of a tax rate that remained flat at 19.9 cents per $100. The new budget actually brings the rate back to what property owners paid in the 2020-21 and 2021-22 budget years.
The district remains fortunate that its state aid actually increased this year because it is largely comprised of School Choice Aid – $3.396 million worth, which was boosted by another $77,025. Most area districts, including neighboring Upper Township, which sends its high school students to Ocean City, have been hammered by severe state aid cuts over the past few years.
Ocean City embraced School Choice and accepts about 192 students a year from around the area. The state has maintained Choice aid while drastically reducing other aid most area districts rely upon.
According to Business Administrator Timothy Kelley, the district has eliminated 18 positions over the past two budget years through attrition to keep spending in check, but still faced health insurance costs rising by some 20 percent.
The district will continue to assess staffing needs due to declining enrollment. Six positions were reduced in this year’s budget and 12 in the new budget, amounting to $780,000 in salary savings and $40,000 in benefits savings.
Ocean City is in a sending-receiving relationship with neighboring districts, including Upper Township, Sea Isle City and Longport. It receives tuition from the sending districts. Tuition is projected to be $13.77 million for the 2026-37 budget, even though 585 students are expected, dropping from 615 in this school/budget year. This year tuition was $12.3 million. Tuition is adjusted after the fact based on students that actually matriculate.
Kelley pointed out the Ocean City budgeting process could run into problems in future years if there are larger decreases in state aid.
There was a guardrail on state aid, Kelley said, ensuring no district would lose more than 3 percent. Had that not existed, Ocean City would have lost $275,000 in aid. Kelley noted that a decline of 10 students coming to the district, a figure used in the new budget, equates to a loss of $210,000 or $21,000 per student.
Taxpayers also contend with the municipal budget and the county budget.
Ocean City’s proposed municipal budget would raise the tax rate 2.41 percent from 57.2 cents per $100 to 58.58 cents. The county tax rate is decreasing again, dropping 0.9 cents to 16 cents per $100.
– By DAVID NAHAN/Sentinel staff
