In Cape May County, being the county seat carries much more burden than benefit. There is no evidence that Cape May Court House businesses flourish because of people coming to conduct county business. The designation as the county seat earns Middle Township no tourist attractions.
If the CMCo. government paid taxes to Middle Township on its property, it would pay
$830,000 annually. This county exemption removes a burden from the islands,
where the money is, and places it unduly on local taxpayers.
What being the county seat does do is remove a large chunk of Middle Township’s tax base from the rolls. In the township’s 2023 budget, the assessed value of property stands at $2.85 billion. But the township carries within that valuation base $571 million in tax-exempt property.
One of every five potential property tax dollars is lost to the exempt property rolls. The biggest holder of exempt property in the township by far is Cape May County. Over $160 million of assessed property value is owned by the county, which pays none of the more than $830,000 in taxes that property would earn the township at today’s local purpose tax rate. The county does, however, definitely use township taxpayer-paid services.
Every time a police officer responds to a call at a resident’s home, all in the neighborhood, all in the township help pay for that response. Every time a police officer responds to a county office location, those same individuals help pay for that response; the county contributes nothing.
In a pre-Covid analysis, done in 2018 by then-Business Administrator Elizabeth Terenik, the police department alone responded to 361 calls for service to county properties. This number did not include calls for routine administrative reasons, directed patrol or even property checks. These were direct individual calls for service to just one of the service departments in the township. There is no reason to think the number of such calls has dropped substantially in the ensuing years.
Every one of those calls for service was covered by Middle Township taxpayers. So let’s take a look for a moment at the burden carried by those taxpayers.
The township is the largest municipality in the county and the 11th-largest in the state. It sits just behind Bass River and just ahead of Vineland. In Cape May County, Middle Township is the second-largest population center, just 10% below Lower Township.
The township must supply necessary services to its population while covering over 70 square miles of land. All of this is the ultimate responsibility of the township taxpayer, who foots the bill for the tax-exempt properties as well.
What are some examples of tax-exempt properties on the Middle Township rolls?
The county jail and cemetery complex has a net taxable value of just under $10 million. The county MUA, which slammed the township for years with end-of-year fees due to stormwater leakage into the township’s aging sewer system, sits on parcels with a taxable value of over $16 million. The list is a long one.
Middle Township hosts the county’s only hospital as well; it sits on property with an assessed value of over $42 million. Recently the Cape May Regional Medical System has begun making an annual payment to the township after a 2021 state statute required a “community service contribution.”
To be sure, tax-exempt properties exist in all the county’s municipalities. Every municipality has public school property, and church and charitable organizations, that are exempt. All have cemeteries and graveyards.
Some have a major tax-exempt presence within their borders, like the U.S. Coast Guard (USCG) Training Center in Cape May. A major difference here is that USCG base has a demonstrable economic benefit to the city and even pays an impact fee to the local elementary school that educates its children.
This system of tax-exempt entities on the property rolls has evolved over the years to help foster organizations and government functions that are necessary and good for the welfare of the community.
What is different in a county seat is the large slice that the county takes out of the township’s tax base, and then the sheer size of the resulting county entity that requires services.
We know this goes on elsewhere in the state, but our concern is with our corner of the world. Middle Township took some hard hits during the pandemic. It also has a number of areas of aging infrastructure that must be modernized without taking on more debt than its tax base can justify.
It is simply unfair to expect the burden for services to county entities to be carried by township taxpayers while the county, which has benefited mightily from the rising land values along the ocean-fronting communities, pays nothing.
If county property is tax-exempt, so be it. That does not prevent good-faith discussions on some form of host community fees or a form of payment in lieu of taxes. It does not rule out exploring user fees for services.
The pandemic was hard on the county as a whole, but the pain in many of the resort communities was ameliorated by a boom in property values.
The 2023 equalization table prepared by the County Board of Taxation shows the assessed value of all property in Cape May County at $52.5 billion. More telling is the calculation of true value of property based on the analysis of land sales, which puts the county at $77.3 billion in land value.
This 47% rise in value does not sit in Middle Township, rather it rests largely in the island. Middle gets some benefit from the rising land values, but it is a tiny benefit at best.
The county gets significant benefit from the land value explosion accelerated by the pandemic. It is the reason why the county can announce a 2.5% decrease in its tax rate while increasing its tax levy by almost 8%.
It is time for the county commissioners to enter into serious discussions with Middle Township to find ways to lighten the burden of the county’s massive presence in the township. There is no reason why the taxpayers of Court House, Goshen, Rio Grande, Whitesboro, Del Haven, Swainton or Green Creek should be the only ones carrying the burden for that presence.
From the Bible: He has told you what is good and what the Lord requires from you: to do justice, embrace faithful love, and walk humbly with your God. Micah 6:8