Awkward is the only way to describe the circumstances surrounding Ocean City government’s pursuit of a half-cent room tax increase, because there appears to be no good way of implementing it without causing a problem for either the lodging industry or government.
And by government, we really mean the taxpayers, residents and visitors who help fund municipal operations through various taxes and fees.
The trouble is in the timing. If the increase isn’t instituted until next January, government will get only around 38 percent of the income it needs to strike a budget for the new year that — if everything else falls into place — doesn’t involve raising property taxes or boosting parking revenue.
The city’s chief budgeteer, Jennie Knapp, who runs a tight fiscal ship, told the council exactly that when members discussed the room tax in January.
At the same time, however, hotels, motels and condominium rental operators know they can’t very well tell people who have paid for their bookings in advance, as is the custom, that, well, umm, they’re getting a second bill because the cost has gone up.
That’s just bad business and could cost them clients, who might feel they’re being nickeled-and-dimed by Ocean City. That leaves these operators one option — figure out a way to take the half-cent room tax hit themselves.
Depending on the size of a hotel or motel, that could mean thousands of dollars by the end of the season, and not every operation in the resort is wallowing in profits.
The dilemma that government and businesses face is not because this year’s proposed budget isn’t being properly assembled. Its calculations are the numerical facts of life based on what government has done in the past and what it wants and needs to do in the fiscal year ahead.
Something will have to give and, from our perspective, it’s up to the government to decide how it’s going to handle that. It would be wrong for government to accommodate its own needs by shifting the burden to one segment of private industry, when that enterprise is one of the mainstays of Ocean City’s tourism economy.