CAPE MAY – Cape May City Council, during its April 18 meeting, adopted its 2023 zero tax increase budget with a last-minute amendment.
The amendment, which was deemed not significant enough to require a reintroduction of the $23.7 million current fund budget, allowed for an added $150,000 from the city’s surplus to cover the addition of two new police officers.
The Cape May City Police Department provides services to the city and neighboring West Cape May and Cape May Point.
The budget called for no new local purpose taxes, leaving the tax levy for 2023 at $10.7 million. Tax revenue covers 45% of the current fund budget. Cape May is able to enjoy such a low reliance on taxes for its annual budget because of its many other strong sources of revenue, including user fee revenue like parking and an occupancy tax that was recently extended to short-term online rentals.
The city also makes use of three self-financing utilities that remove certain areas of expense from the taxpayers and are driven by their own fee collection activities.
Lastly, the city has a very healthy $12.7 million surplus, which permits the use of almost $4 million in the balancing of the budget.
City auditor Leon Costello spoke of the difficult year faced by many municipalities trying to deal with rising costs for health care premiums, pensions and other costs over which the municipalities have little or no control.
He said the strong sources of revenue outside of taxes in Cape May allows the city to respond to increasing costs without tax increases.
During the public hearing on the budget, former Councilman Chris Bezaire said the city needs to resurrect and pursue options to ameliorate its high cost of support for the Lower Cape May Regional School District, where he said the city pays a disproportionate share of expense due to its high valuation levels.
According to the budget document, Cape May’s valuation rose to just under $3 billion dollars with an increase this year of $22.7 million.
Another issue from the budget hearing came from Jules Rausch of the Taxpayers Association. Rausch argued that more than half of the enrollment at the local school comes from the Coast Guard base, which contributes much less than half of the school’s revenue. He urged the city to find ways to increase the Coast Guard allocation to the school district, reducing the burden on city taxpayers.
The city’s three self-financing utilities each saw a budget increase this year.
The city’s water and sewer utility budget rose to $7.5 million, up from $7.3 million in 2022. The major source of revenue for the utility is $6.9 million in fees paid by water and sewer users.
The beach utility is budgeted at $3.37 million this year, up from $3.1 million in 2022. The major source of revenue here is the sale of beach tags, with $2.7 million anticipated this year.
The tourism utility, which incorporates expenses related to Convention Hall, is budgeted at $1.3 million, up from $1.15 million last year. The largest single source of revenue in this utility is a proportionate share of the occupancy tax receipts.
Following the amendment, which allowed for the increase of two police officers, the budget was adopted on a unanimous vote of the council.
Contact the author, Vince Conti, at vconti@cmcherald.com.
