OCEAN CITY – The City Council has introduced the mayor’s 2025 budget, which has a 7.04% increase in the local purpose tax rate, following a 2024 budget that saw a 7.5% jump. The increases over two years brought some residents to the podium at the council’s April 10 meeting to complain about what one called the “tax and spend” practices of Mayor Jay Gillian.
Resident Dave Hayes criticized the mayor directly, saying, “He talks about all the wonderful facilities for the community’s young people, while at the same time driving out families with higher taxes.” Hayes called for a focused effort to cut costs instead of always looking for sources of new revenue. “Ocean City already has the most revenue in its history,” he said.
The $112.5 million budget calls for a 3.76-cent increase in the local purpose tax rate, moving it from $0.5340 to $0.5716 per $100 of assessed value. The actual tax levy increase is $5.8 million, 8.5% higher than 2024’s.
The tax rate hike means that a home assessed at $645,000 would see $243 in increased taxes this year, and that one valued at $1 million would have a $375 increase.
The budget also reported a year-to-year decrease in the city’s general fund surplus, which started 2025 at $1 million below the level at which it began 2024 – $11.4 million in 2024 compared to $10.4 million in this year. The new budget uses $5.5 million of that surplus as revenue, representing 53% of the available balance.
Chief Financial Officer Frank Donato said the new budget does not include grant income that might come in over the course of the fiscal year. Donato noted that in 2024 final grant income to the city was $12.7 million, while that number at the start of the 2025 budget year is only $332,271.
The budget states that the total property tax bill on a home assessed at $1 million would be $11,747, up $527 year-to-year. Included in that total bill would be county, school and library taxes. Ocean City, along with Avalon, is not part of the county library system and maintains a separate library for which there is a separate tax rate, with a minimum set by the state.
This year Cape May lowered its overall county tax rate. It also lowered the county tax levy, by just over $600,000, but Ocean City, with its market value increases in real estate, still saw a county tax levy increase of $1.4 million.
A theme in the public criticism of the budget during the public comment portion of the April 10 meeting was the city’s salary and wage spending, along with the associated costs for pensions and benefits.
Dave Breeden called for a hiring freeze, better reporting and monitoring of staff levels and promotions and organizational changes, and adoption of a nepotism ordinance, for which he did not offer details.
Breeden argued that Ocean City has no revenue problems. The problem, he said, is rooted in skyrocketing personnel costs that are linked to how the mayor manages the city’s departments.
Gillian did not respond to the criticisms.
The 2025 budget shows a $1.7 million increase in salary and wages, not counting pension and benefits expenses, making the $40 million salary and wages appropriation category the largest area of budget spending.
At $74 million the local purpose tax levy that would result from the budget represents 49% of the total tax levy. The other components of the total tax levy include $7.7 million for the library, $26 million for the school district, $42 million for the county tax, and $2.4 million for the county open space levy.
The budget is scheduled for a public hearing and potential vote to adopt at the May 8 council meeting. The introduced budget can be viewed here.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
