CAPE MAY CITY – For the sixth year in a row the city has introduced a municipal budget with no increase in the local purpose tax. The $28 million budget for the general fund calls for a $10.9 million taxpayer levy, which is the smallest percentage of levy to total general fund appropriations in the county.

The total proposed budget for 2025 is $41.5 million when the $13.5 million in planned appropriations by the city’s three self-financing utilities is added in. The Water and Sewer Utility budget is $7.6 million, the Beach Utility is budgeted at $4.3 million, and the Tourism Utility stands at $1.6 million. The utilities, all financed through user fees, remove significant burdens from taxpayers.

The total $41.5 million in appropriations is 4% higher than the budgeted spending in 2024.

Taxpayers also benefit from strong local revenues in the general fund. The city has anticipated revenues from parking at $2.1 million, along with $3.1 million in occupancy tax revenue and almost $600,000 in interest on investments.

The city is making use of $6 million in surplus that City Manager Paul Dietrich says will be partially used to fund capital expense projects for which no debt will be issued. Total debt service is budgeted at $4.8 million, or 17% of the general fund appropriations.

The city’s largest general fund expenditure is salaries and wages, where the 118 full-time personnel and roughly 60 seasonal and part-time employees cost the city $9.5 million.

Cape May also has a strong shared-service relationship with neighboring towns on Cape Island. The Cape May Police Department provides service to both West Cape May and Cape May Point. The city also supplies water from its desalination plant for both municipalities and for the Coast Guard Base located within the city limits.

The city faces a major challenge as it seeks funding for the $30-million-plus construction of a new desalination plant.

Cape May uses $6 million, or 44%, of its $13.5 million surplus to support the budget.

The revenues expected from the Water and Sewer Utility are in line with the previous year. Dietrich reported to the City Council that the city is well ahead of the state’s requirement to remove all lead distribution water mains and services by 2031.

Anticipated revenue by the Beach Utility is expected to grow from $3.1 million last year to $3.6 million this year on the basis of strong beach tag sales and fee increases added last season.

The Tourism Utility will see new expenses as the city factors into the budget new events and staffing for the new community center.

The local purpose tax rate will remain at $0.361. A $750,000 home will pay $2,707 in municipal taxes.

Several major capital projects are on tap to move ahead in 2025, including a new police station. Funds and grants will continue to be sought for the city’s two largest projects, the desalination plant and the seawall expansion.

A public hearing on the budget is scheduled for the council meeting on May 20 in City Hall at 5 p.m.

Contact the reporter, Vince Conti, at vconti@cmcherald.com.