STONE HARBOR – Stone Harbor Tax Collector Deborah Candelore explained to Borough Council Aug. 2 that she has been unable to keep up with all the calls and emails flooding her office concerning the third quarter property tax bills. At one point, she said she received 39 calls in one hour.
The property taxpayers in Stone Harbor and elsewhere in some of the other 16 municipalities in the county might be excused for being confused. Stone Harbor did not raise its municipal tax rate in 2022. Readers of the Herald and other media sources would also know that the county announced to all who would listen that it had not raised its tax rate in 2022.
In a borough like Stone Harbor, that leaves only the district school tax to account for what seemed like a disproportionate increase in the actual tax bill. Yet, a quick check of the school district user friendly budget for 2022-2023 shows the school tax is not the culprit.
An Aug. 4 posting on Stone Harbor’s website tells residents, “The Cape May County budget was increased this year, so consequently the cost of that increase affects all property owners.”
Did the news media get it wrong? Did the county sneak in a tax increase that got no publicity? No, the borough’s post is correct. It is just not self-explanatory.
The source of the confusion is that most taxpayers would assume that no increase in the county tax meant no increase in the county tax portion of their tax bill; however, that is not how the tax rates are allocated.
When the county adopts a budget and publicly announces a tax rate, that is not the tax rate that county taxpayers can expect to pay. In 2021, the difference from lowest to highest county district tax rate for the 16 municipalities was almost eight cents per $100 dollars of assessed value.
The county tax administrator has not yet put out the tax rate summary for all taxing districts for 2022 but using the completed 2021 summary serves to illustrate the process.
In 2021, the county tax rate announced at the adoption of the budget was $0.2344, the same as 2022. The actual county levy for 2021 was $135,064,243. That levy number is what must be spread across the “taxing districts” and it is not done by applying the county tax rate of $0.2344 to property in each district.
In 2021, Woodbine had the lowest district county rate, at $0.210, and Sea Isle City had the highest, at $0.287. That marks a difference of over 36% in the tax rate applied to cover the county levy.
Back to 2022, it is entirely possible for the local municipality, say Stone Harbor, to maintain a flat local purpose tax rate and for the county to announce no increase in the county tax rate. Yet, the county budget shows an increase in the county’s tax levy of over $14 million. The levy is what counts, and the levy is not spread evenly across the county.
The county uses a formula that is based on the value of annual real estate sales and the number of those sales. The period is from July 1 to June 30. If a community has value in the sales that exceeds other municipalities that community will pick up a larger share of the county levy.
At the Stone Harbor meeting Aug. 2, Chief Financial Officer James Craft, Tax Collector Deborah Candelore and Tax Assessor Margaret Slavin all shared the podium in an attempt to explain the allocation mechanism to a quizzical governing body.
In a year in which the local tax rate and the announced county tax rate did not rise, Stone Harbor taxpayers saw a 5.5% increase in their taxes driven largely by an 11% increase in the county district rate. In fact, the county district rate for Stone Harbor is now the equal of the local purpose tax rate.
Slavin told council that the value of the borough real estate has risen over 10% on a two-year average. That success means a higher share of the county levy for every borough taxpayer. That also explains how the county can increase its levy by over $14 million and announce no increase in the overall county tax rate.
Those looking for where this is explained for the benefit of taxpayers will be disappointed. The formula for equalization of value and distribution of the levy is complex and not generally available.
The best guide to whether one’s taxes are likely to rise has little to do with the county’s announced tax rate when it adopts an annual budget and much more to do with the volatility of the real estate market in one’s municipality.
Have any thoughts and/or information on this story? Email vconti@cmcherald.com.
