Sand and taxes

February 05, 1992

Any day now, the federal government will decide whether it will pick up the full $12.2 million cost of repairing storm damage to Ocean City's beach replenishment project or whether the state will have to contribute up to 35 percent. Even if Washington pays the full tab this time around, it seems inevitable that the federal government will be less and less reliable as a ready source of funding for such expensive projects.

Regardless of the federal government's decision, funds for this round of repairs are assured. Maryland has $8 million in a beach replenishment account, financed jointly by the state, Worcester County and Ocean City itself. Under the worst-case scenario, this fund would take a $4 million hit for immediate repairs. With the state committed to an annual contribution of $1 million, and the county and city committed to $500,000 each, the fund would quickly replenish itself. The more troubling questions concern the long-term outlook.

The state's beach replenishment account aims to cover storm damage that might occur every four years or so. But this kind of damage is not totally predictable, and so far this year Ocean City has seen three severe storms. If that happened again during the next couple of years, the fund would quickly be depleted.

Sooner or later, then, the legislature is going to be faced with an unpleasant choice -- allow a lot of ocean-front real estate to become more vulnerable to wind and waves or pour even more millions of dollars into erosion control. At that point, the current formula for the replenishment fund -- 50 percent from the state, and 25 percent each from the county and city -- will bear more scrutiny, and pressure will build for the state to bear less of the burden. Already Sen. Laurence Levitan, chairman of the Senate Budget and Taxation Committee, has expressed his impatience with anti-tax sentiments from Worcester County residents. His response has been terse: No new taxes? Then no new sand.

That sentiment could easily spread. Worcester County residents pay a property tax rate of $1.59, second-lowest in the state. Moreover, they pay a local piggyback tax of only 20 percent, while every other county levies a charge of 50 percent. They can afford to share more of the burden of protecting their beach and their property.

Most scientists question the long-term effectiveness of erosion control. But state officials also acknowledge that giving up entirely on replenishment efforts would be a costly mistake. Yet they eventually have to face the tougher question of who will pay -- and come up with a formula that puts more of the burden for replenishment projects on those who most directly benefit.

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