Letter: Rehoboth budget, priorities unfair to homeowners

Gary Glass


April 5, 2019


A new fiscal year began this week in Rehoboth, and once again, homeowners are taking a major hit in higher taxes and fees, while commercial landlords and businesses enjoy a free ride. This is not fair.  Everyone should contribute to the cost of the city services that they are using. 


Mayor Kuhns and our commissioners approved a 50 percent increase in the property taxes, a 30 percent increase in water rates, and a 60 percent increase in the wastewater fees. This is on top of last year’s 100 percent increase in residential rental tax and the parking fee increases. How much of this do the hotels, restaurants and retail shops contribute?


Our homeowners that rent their homes pay a 6 percent rental tax, but commercial landlords that rent to businesses pay zero rental tax in Rehoboth. Compare that to Bethany Beach, which collects a 7 percent rental tax from commercial landlords. Rehoboth provides no property tax relief for senior citizens or homesteads, and Rehoboth does not penalize vacant and blighted commercial properties like many other cities do.


Rehoboth does not collect any hotel room tax, compared to 4.5 percent collected by Ocean City, Md., 3.25 percent in Bethany, and 3 percent in Fenwick Island. Milton even charges a 3 percent hotel tax. Why do the hotels in Rehoboth get a free ride?

The restaurants in Rehoboth are assessed zero gross receipts tax by the city, compared to 0.65 percent assessed by the state. Another free ride for businesses in Rehoboth. 


Two years ago, Rehoboth voters elected Paul Kuhns for his Wall Street knowledge of municipal finance, and Lisa Schlosser for her experience overseeing a big budget in the Department of Defense. But instead of fiscal prudence and savvy, we are seeing unprecedented spending on a pro-business agenda, which prioritizes development at all costs, and leaves a deficit that is draining the city’s rainy day reserve fund.


This year’s $24 million budget spends a shocking $720,000 on a no-bid contract for EDiS to spruce up the three public restrooms on the Boardwalk. This work will begin soon and should be completed by Memorial Day, when you can see for yourself, and see what an excessive and unbelievable cost to taxpayers. They aren’t even replacing the toilets! 


Don’t forget that EDiS was Rehoboth’s construction manager on the City Hall project, which went badly over budget. EDiS now collects a big fee to operate our new City Hall.


EDiS also is behind the no-bid proposal for a $10 million parking garage next to City Hall. The homeowners in Rehoboth do not want more cars and congestion, and anyone with eyes can see that the existing parking lot is pretty empty most of the year, including most weekdays in the summer. But Paul, Lisa, and the gang are tripping over themselves in a mad rush to line the pockets at EDiS and other developers, paid for on the backs of Rehoboth’s homeowners. 


With all the “for sale” signs around town, it’s starting to look like Rehoboth’s homeowners are voting with their feet. I hope not. 

The future of Rehoboth is in the hands of the homeowners, who need to stand up for fairness, and make their voices heard by attending city meetings, emailing the mayor and commissioners, and voting at the ballot box in the next municipal election this August. If you want to make a difference, then you need to speak out. Our democracy does not work if you sit back and wait for your neighbor to do it for you. 


Gary Glass
Rehoboth Beach