OCEAN CITY – Mayor Jay Gillian used the March 13 meeting of the governing body to deliver his annual State of the City address, along with a copy of his proposed budget for 2025, which calls for a 7% increase in the local purpose tax rate and an 8.5% hike in the actual tax levy.
The $124.6 million budget proposal represents an increase in spending of $5.5 million over 2024. A presentation of the budget to the council by Chief Financial Officer Frank Donato is set for the March 27 council meeting, with a formal vote to introduce the 2025 budget coming at the subsequent meeting on April 10. Under Ocean City’s form of government, the budget process begins with the mayor’s proposal.
Gillian said the average tax bill will increase by $242 under the new budget; that is the local purpose tax rate increase only. The budget documents list a home assessed at $600,000 as paying $225 more, and one at $750,000 paying $281 more. Gillian did not give a specific average home value for his projected average $242 increase.
The mayor said the 3.7-cent increase in the tax rate is the same as last year’s. The 2024 budget had a 7.46% increase in the tax rate and a 9.37% increase in the levy.
Municipal budgets can exceed the 2% state cap on spending increases for certain exempt expenses such as pension payments, employee health insurance premiums and debt service, among others.
Gillian began his State of the City presentation by saying, “We are all blessed to live in this beautiful town,” a town in which “our problems are small and our future is great.” Admitting the city has its challenges, the mayor then takes the speech directly into a justification of the city’s “relatively low taxes.”
Tax dollars cover a multitude of services, Gillian said, noting the new senior center programs, “first-class” facilities for children and a fully-equipped community center. The mayor’s list of what tax dollars buy ranged from electric vehicle charging stations to trash services, from a summer concert series to jitneys.
He reminded the public that tax dollars pay for “improvements in every part of the city,” speaking of back bay dredging, flood mitigation projects, rebuilding of the boardwalk and road and infrastructure work, among others.
Those tax dollars also enhance the investments people have made in their homes, he said. Gillian said that the average sale price of a residential unit in 2010 was $580,000. “By 2024, it more than doubled to $1.3 million,” he added. He did not mention affordable housing in the presentation.
Saying that the city boasts “top-notch” full-time police and fire departments, the mayor also praised the “amazing work” of the city’s Public Works department. He then moved on to the variety of programming organized by the city’s Community Services Department, “with events and social service programs for people of all ages.”
He said at that point that “supporting these men and women comes at a cost.”
Contracts for city employees, along with the expense of benefits and pensions, make up the single largest area of expense in the budget, Gillian said. The mayor’s budget shows that salaries and wages, even without the added cost of benefits and pensions, is a $40 million budget expense, up 4.5% from 2024.
“Ocean City must maintain staff to meet the needs of the 150,000 people who populate Ocean City in the summer and the growing off-season population,” he said.
He ended by reminding the public of the city’s “near-perfect AA bond rating.”
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
