CAPE MAY – During the April 6 Cape May City Council meeting, the city’s citizen advisory committee on municipal revenue and taxation urged the governing body to immediately increase the municipal occupancy tax from 2% to 3%.
Committee chairperson Dennis Crowley demonstrated that the city policy of collecting only a 2% occupancy tax has cost the municipal budget between $600,000 and $700,000 per year, funds that could be used in the unrestricted support of municipal services.
Crowley noted that 186 municipalities across the state have chosen to levy a municipal occupancy tax, with only four of those that have implemented the tax doing so at less than the 3% authorized by state statute.
State sources show that only two Cape May County municipalities elected to implement the tax, Middle Township, at 3%, and Cape May, at 2%.
Crowley also urged that the city amend its ordinance to include properties rented through transient space marketplaces, such as Airbnb.
In Cape May, these properties currently pay the state occupancy tax, but the city has not included them in its tax ordinance.
“The issue here is not property taxes,” Crowley said. “It’s other available revenue.”
The committee’s report also noted that Cape May is a unique destination whose visitors are not going to be discouraged by a 1% increase.
“That argument is not based in reality,” Crowley said.
