The Worcester County Commissioners this week agreed to set in motion the process that would allow them to formally consider a 1% increase to county’s hotel room tax.
Ocean City Mayor Rick Meehan made the request of the commissioners at their meeting Tuesday in Snow Hill. He said raising the room tax from 5% to 6% could generate new revenue not only for Ocean City’s tourism marketing but millions in much-needed revenue for rising police salaries and public safety costs.
“Tourism is our only industry and it’s extremely important that we continue to support it, and we have a mechanism to cover those costs and increase what we do to promote Ocean City,” Meehan said.
Based on 2024 room tax revenue, the 1% increase could mean close to $5 million in new money for Ocean City.
The resort’s $25.6 million in room tax revenue represent 92.5% of total room tax revenue in fiscal 2025 for Worcester County, according to the county treasurer’s office. Ocean City dedicates 40% of room tax revenue for tourism and hospitality marketing, and the remaining 60% goes into the city’s general fund.
General fund contributions could be used for Ocean City to pay for a projected $13 million increase in police salaries over the next three years, the result of a new negotiated agreement with the police union.
The resort also is facing new public safety expenses like hiring new firefighter/EMTs, new firefighter equipment, and paying for state-mandated dispatcher training, Meehan said.
Because two-thirds of Ocean City’s roughly eight million annual visitors come from out-of-state, Meehan said that mean room tax revenue at Ocean City properties is generated mostly from visitors.
“This is something that doesn’t cost our taxpayers anything,” he said.