STONE HARBOR – The Borough Council has introduced a $23 million general fund budget for 2025 that includes a 7.2% increase in the local purpose tax rate.
The tax rate would move up 2.2 cents, from $0.3120 to $0.3345. Included in the budget is a separate water and sewer utility budget for $5.8 million that has an almost $1 million shortfall and calls for a $125 per quarter payment for all properties for the remaining three quarters of 2025.
Ken Biddick, who chairs the council’s Utilities Committee, says there will be a new water and sewer billing formula established in 2026.
Under the proposed budget, the average home in Stone Harbor is said to have an assessment of $1,650,000, and the local tax for 2025 would be $5,519.
Cynthia Lindsay, the borough’s chief financial officer and interim administrator, said at the council April 16 meeting that the 2025 budget year is one with challenges, but one that is headed in the “right direction.”
Perhaps the biggest challenge for 2025 was for the borough to craft a budget that came in under the mandatory state appropriations cap, which limits spending increases in defined expenses to 3.5% over the previous year.
Getting under the cap limit was a long process. It was not until the beginning of April that Administration and Finance Committee Chair Jennifer Gensemer was able to announce that the borough would make it under the cap limit and would not need to request a waiver from the state. Appropriations cap expenditures in 2025 are $14.5 million, or $139,172, below the spending limit.
Cap expenditures, those defined by the state as part of the cap calculation, represent just under two-thirds of the total general fund budget appropriation level. The exceptions to the cap include debt service, payments for shared service arrangements, increases in pension and health-care payments, and stormwater and solid waste handling.
According to Lindsay’s April 16 presentation, the borough fell into its problem with the appropriations cap limits in 2021, when the borough decided to establish a paid firefighter staff to augment the volunteer fire department and improve response times.
She argued that the borough should have taken the step by using a referendum to permanently increase the allowable cap level. Without a raise in the cap level, the borough has been inching by on the appropriations cap each year, limiting its ability to respond to service issues.
In the proposed 2025 budget the borough is clearing space under the cap through a series of actions that included working to establish a shared-service agreement for the construction office with Wildwood Crest, outsourcing certain functions including tourism and information management, and moving general fund expenses that serve the water sewer utility to the utility budget, which is supported by fees rather than tax dollars.
Even with the 7.2% increase in the municipal tax rate, the largest portion of a borough property owner’s tax bill remains the county tax, not the local tax. While the county has reduced its tax rate in each of the last three years, the county levy is distributed to the municipalities based on changes in true value of property rather than assessed value.
The runup in value in Stone Harbor in the last few years has resulted in the county tax being 50% of the total tax bill, according to Lindsay’s presentation. The local purpose tax from the municipality comes in at 43%, and the school tax is 7%.
Debt service payments in the new budget, even though down from last year, still claim more than $1 out of every $5 collected in tax revenue. The shared service arrangement with Wildwood Crest is budgeted at a payment level of $60,000, which opens the issue of whether such a sum is sufficient to get service levels appropriate to the large number of construction projects the borough sees each year.
The outsourcing of the previously in-house tourism function has raised concern by some members of the public about the “boots on the ground” nature of special-event management, especially with the long list of events listed in Lindsay’s presentation.
Her presentation also hinted at a shared-service arrangement for the Fire Department, an issue some members of the public have weighed in on during public comment at council meetings. The comments were generally not in favor of shared services for public safety functions.
The public hearing on the budget is scheduled for the May 20 council meeting in Borough Hall at 5 p.m. At that time, barring any significant changes to the budget, there will also be a vote on adoption.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
