County Tax Rate to Remain Level

CREST HAVEN — The gray skies and drizzle outside matched the mood inside Jan. 17 at the county Administration Building at the first scheduled workshop on the 2008 county budget, as it became clear the county budget team grappled with reduced revenues and higher fixed expenses this year in order to present a balanced budget.
On Jan. 22, freeholders introduced the county budget that retains the 15.13 cent county tax rate, as in the prior year.
“The rainy day is here,” County Treasurer Ed Grant told a room full of county workers and members of the public.
Grant said his team had to contend with a 101 percent jump in pension costs from 2007 to 2008, from $1.9 million to $3.8 million due to increasing numbers of retirees; increased health costs and increased fuel costs, and, among other items, an increase in the Prosecutor’s Office budget from $4.6 million to $5.8 million from negotiations surrounding the pending Bigley court action.
Add to that the steady decline in real estate market activity here and consequently County Clerk fees revenue from $9.8 million in 2005 to $5.7 million in 2007, and Grant outlined a 2008 county budget in which the tax rate for county taxpayers will, for the first time since 1998 at least, not be reduced but rather most likely stay about the same.
Grant emphasized Jan. 17 the figures he presented to freeholders and the public at the workshop were still preliminary.
Missing still are state welfare figures and peer grouping revenue figures, said Grant, which he said he estimated based on last year’s figures.
Rainy day moves included holding the line on 51 of 83 operating expense budgets, with those being either frozen or decreased, said Grant. Contractual line items, public safety, health benefits, schools, fuel/utilities, state required budget items appropriations to offsets revenues, and contractual items being the exceptions.
With all that said, Grant presented freeholders with a county budget of $136 million, a 2.18 percent increase over last year’s budget of $133 million. The county tax rate, at this still preliminary stage, will remain almost exactly the same as last year, at 15.13 cents per $100 of assessed value.
The amount to be raised by taxes is $82 million, up 2.52 percent over last year.
Although total county ratables are up by 2.35 percent over last year, from $52.9 billion to $54.2 billion, county fees from real estate transactions are down over last year, with 2007 revenue at $5.7 million, a 12 percent drop over 2006. County Clerk fees have been steadily declining since the real estate boom of several years ago. Revenue peaked in recent years in 2005, at $9.8 million, falling off sharply in 2006 when it dropped off 34 percent in one year. It’s been in steady decline since, and Grant said 2008 will more than likely see further declines, with 2008 likely bringing in only $4.8 million in revenue from county clerk fees. The real estate market apparently has not yet hit bottom here.
Some fixed costs, especially pension costs, are up this year. Pension costs, especially, said Grant, have jumped 101 percent, due to increasing numbers of retirees and what Grant mentioned were some “abuses of the system.”
The prosecutor’s office was a special case this year, owing to a pending Bigley action, a civil action filed by the prosecutor against the county challenging previous appropriations as insufficient. The 2008 budget for the proseuctor’s office is proposed at $5.8 million, a 25 percent increase over 2007’s $4.6 million. The prosecutor’s budget has more than doubled since 2003, from $2.6 million.
Portions of the Bigley matter have been settled through negotiation, including salary figures from 2007 and now 2008. Barbara Bakley-Marino, county human resources director, said nine new positions for 2007 came out of negotiations with prosecutors along with a line item for 2008, at $973,000 for salaries and wages, rather than a set number of new positions, since the Supreme Court has yet to finally settle certain questions relating to the number of new positions there; that decision will likely be handed down this year.
The county budget was set to be introduced Tuesday at the freeholders’ 4:30 p.m. meeting, with an additional workshop set for 2 p.m. if needed, Freeholder Director Dan Beyel said.
Contact Avedissian at (609) 886-8600 Ext 27 or at: savedissian@cmcherald.com.
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CAPE MAY COUNTY
BUDGET MESSAGE FOR YEAR 2008
FREEHOLDER DIRECTOR DANIEL BEYEL
On behalf of the Cape May County Board of Chosen Freeholders, I am pleased to offer the 2008 county budget.
The county started this year’s budget facing over a five million dollar increase just in pension, health benefits and existing salary and wage obligations. That increase didn’t even consider any new expenses such as escalating fuel cost, new and ongoing maintenance and service contracts and the need to increase employees as well as operating expenses at both the Prosecutor’s Office and the Correction Center.
The county’s 2008 budgetary challenges were exacerbated by significant revenue loses in the wake of a sobering housing market. After witnessing seven straight years of double digit growth, this year’s 2.35% ratable increase is the smallest in a decade.
The correlating effect was a loss of $800,000 in fees collected at the County Clerk’s office. To give a perspective, last year the county collected four million dollars less than just three years ago. That’s over a 42% reduction. Looking ahead this year, we’re anticipating an additional loss of close to one million dollars. This decrease in revenues will naturally lead to a diminishing surplus.
Despite these disconcerting setbacks, the county is able to present a 2008 budget that does not cut any county services and at the same time enhances public safety. It also does not raise the tax rate and only increases the tax levy two and a half percent.
The Budget also allows the county to continue its national awarded municipal grant program and the regionally recognized arts, cultural, and history grant program.
I’d like to provide an overview on how we were able to offer the county taxpayers such a favorable budget in light of increased mandated expenses and reduced revenues.
Over the last few years when the county was seeing extraordinary ratables and substantial revenues, we financially positioned ourselves to prevent any dramatic impact from a predictable decline in our astonishing growth.
Not only did we provide significant tax rate cuts, we were deliberate in restricting our spending and saving for the future. For a number of years, we instituted a self-imposed cap limiting the increase in our tax levy to the precise amount of new revenues. We kept our tax levy well below the state’s mandated cap.
Over our more prosperous years, we set up reserve funds to pay for the full share public employee pension kick-in, double digit health insurance increases, Accumulated Leave Compensation as well as trust accounts for General Liability and Workers Compensation insurance.
So for the 2008 budget, we have the money set aside for the employee pension increases, we can readily pay the 4% increase in health benefits, we no longer have to increase the Accumulated Leave Compensation Trust Fund, and we can decrease our Insurance Trust Accounts.
Because of our exceptionally high Moody’s rating and extensive bonding capacity, it is more feasible for the county to shift much of its capital funding toward bonds. This policy move will reduce the 2008 capital budget by over $800,000 and our “pay as we go” appropriation by $900,000.
So in short, the 2008 Budget reflects years of careful spending and thoughtful saving. We have to recognize that although using our savings is appropriate at this time, maintaining a flat tax rate and restricting our tax levy below the state cap will be difficult if we face an extended slump in our housing market. Beyond the 2008 budget, our county’s focus needs to aggressively reinforce our spending limitations.
This year’s budget marks the thirteenth straight year without an increase in the county tax rate. We anticipate that when all other county budgets are complete, Cape May County’s tax record will stand as the overall best of all of the twenty-one counties in the state.
The specific overview breakdown of this year’s budget in rounded-off dollars is as follows:
1. The Total County Budget for the Year 2008 is $136 million compared to the adopted 2007 Budget of $133 million. Although offset by reductions in the Capital budget and Deferred and Statutory category, operating expenses increased $3.5 million. I’d like to note that the operating expenses would have increased $4.9 million to accommodate contractual obligations, public safety additions, health benefits, increases to schools, state mandates and fuel and utilities. However, with 51 operating budgets being frozen or reduced to a 10% target, the increase operating expenses for 2008 is the same increase as the 2007 budget. I’d like to also note that over $600,000 of these operating expenses are offset by revenues.
Total Salary and Wage increases for all contract obligations and anticipated cost-of-living increases for non-bargaining unit employees was less than one percent. Since the Accumulated Leave Compensation Trust Fund is now fully funded, the county was able to reduce the salary and wage category by $1.3 million.
Except for public safety, the county has instituted a freeze on all new full time positions as well as reviewing all vacant positions before replacements are made. Four new correction officers are included in this budget in addition to $350,000 appropriated to the Prosecutor’s office for new positions. The budget also includes 2 part time fare free drivers and one part time physical therapist for the Home Health Agency.
2. The amount of money to be raised by property taxes to support the 2008 budget is $82 million compared to $80 million for the year 2007. The amount of revenue other than property tax used to support the budget is $54 million.
3. The budget uses approximately 54% of our surplus. Specifically, $14.8 million of the available $27.6 million while reserving $12.7 million. As previously stated, with less revenues expected from real estate transfer fees from the county clerk’s office in addition to less interest on investments from the county’s reduced reserves, $500,000 less in surplus is being used to support the 2008 compared to the 2007 budget.
4. The County equalized tax rate for 2008 will be 15.13 cents per $100.00 of assessed value maintaining relatively the same rate as 2007. Although it will vary depending on the ratio of assessed value to true value in each of the County’s sixteen municipalities; an average taxpayer will pay $151.30 for $100,000 of property assessment.
5. The total amount of estimated ratables for the Year 2008 is $54.2 billion compared to $52.9 billion in the year 2007. This is a $1.2 billion or a 2.35% increase.
These are the highlights of this year’s budget. I believe it continues to exceptionally serve both the residents and visitors of Cape May County. It sustains our outstanding tax record while keeping our services among the finest in the state.
I’d like to just take a moment to highlight a couple of the county’s initiatives in the upcoming year.
It is becoming increasingly clear how dramatic human behavior is contributing toward global warming. Indisputable scientific data is moving governments nationwide to take the lead in energy conservation and alternative technology to help reduce the gas house effect.
For years, Cape May County has been in the forefront of energy conservation to minimize the increases in fuel costs. Now, it’s our responsibility to step it up.
We are currently undergoing a county-wide comprehensive energy master plan. Every county facility is being evaluated to determine the best method to reduce consumption. As part of the county’s commitment, every new facility will aim for the highest rating possible under the Leadership in Energy and Environmental Design standards.
On vehicles, with few exceptions, all new purchases will continue to be hybrids. We also will be looking at increasing our use of electric and bio-diesel fuel operated trucks and buses. I’d also like to point out that the objective of our Shared Services program will be more centered on helping local governments improve their methods of energy use.
Cape May County may not be able to stop the artic ice caps from melting but we’ll do our part in reducing our energy consumption, fuel dependency and greenhouse emissions.
When most people immediately think of county government, they think roads and bridges. Not only is maintaining and rehabilitating our infrastructure a vital component of county government, it is the most costly. In this upcoming year, Cape May County will be spending over ten million dollars on repairing and upgrading our roads and bridges. At the same time, the Freeholder Board’s most persistent lobbying efforts will be set on attaining more state and federal funds to partner with the county in making much more needed transportation improvements in the county.
I’d like to just touch on one other exciting project in 2008.
Working with the Library Commission, the county is planning to upgrade its libraries as well as construct a new facility in Stone Harbor, Sea Isle City and its main branch in Cape May Court House.
One of the proud hallmarks of this Freeholder Board is creating and improving educational, cultural and intellectual opportunities. When we look at our community college campus, technical high school and special services school, we take a particular delight in our accomplishments.
Now we want to elevate our library system. Not only do we want to offer state of the art technology in this information age, we want our libraries and the programs they offer to be centerpieces for our communities and the signature of one of the best things that county government does.
The 2008 Budget complies with the New Jersey “CAP” Law, which limits a property taxation increase to 2.5% in the year 2008. Public Hearing on the Budget will be held on February 26, 2008 at 4:30 P.M. in the Freeholder’s Meeting Room at the County Administration Building. Public comment and recommendations are welcome. In addition to being on hand at the Office of the Clerk of the Board at the Administration Building – all financial documentation pertaining to this proposed budget will be accessible on the county web site at capemaycountygov.net.
In closing – as always – I would like to personally thank my fellow Freeholders as well as all of the department heads, county employees and the budget team for their commitment to county government and their hard work and professionalism in working with the Freeholders in preparing this budget.
And again this year, I most importantly want to express the Board’s genuine appreciation to the citizens of Cape May County for giving county government both the opportunity and the resources to serve you. Thank you.