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Middle Faces Budget Challenges

Data comes from Middle Township financial documents.

By Vince Conti

COURT HOUSE – Measured by land area, Middle Township is one of the largest of the state’s 564 municipalities, ranking in the top ten. That reality places a significant burden on many municipal services, from policing to trash removal to infrastructure maintenance. 
With a population of over 20,000, the township is the second largest population center in the county and the only one of any size that has maintained continuous population growth since the county’s population peaked with the 2000 census. 
Each year, the township grapples with revenue that is not growing fast enough to sustain quality services for an expanding population spread across a large geographic area. The township has $2.8 billion in taxable property valuation which places a constraint on the tax rates it can sustain. Its position as a county seat also adds to the value of tax-exempt property. According to the 2022 budget, tax-exempt property in the township totaled 18% of the value of taxable property. Some relief has come in the form of an annual contribution to the township from the tax-exempt Cape Regional Medical Center, in accordance with new state requirements for hospitals.
Despite these challenges, a steady percentage of the township’s budget has continued to rely on taxes. From 2015 to 2022, the township’s general budget has shown an almost unchanging dependence on taxpayer support. In the eight budgets during those years, the local purpose tax levy required to support the township’s general budget has not varied by more than 2% as a percentage of the general budget revenues. In 2015, the tax levy was 59.16% of the general budget revenue. In 2022, it stands at 59.91%. 
The general budget has grown and there were four tax rate increases in those eight years. Still, the actual percentage of the budget the taxpayers support has remained steady. Roughly 40% of the general budget annually comes from sources other than taxpayer revenue.
The township budget does not have a great deal of flexibility when it comes to unanticipated demands. The pandemic had an impact on the township coffers. The potential burden on the taxpayers was lessened because the township was able to use almost a million dollars a year for two years in federal pandemic relief funds. The 2022 municipal budget makes use of just over $900,000 of such funds. No more federal pandemic relief funds will be available next year.
During the pandemic, the municipal surplus also declined. From a high of $2.6 million at the end of 2019, the surplus dropped to $1.6 million at the close of 2020 and rebounded to $2.1 million at the start of 2022. Even at its peak, the surplus was modest by standards of other county municipalities. The other county population center, Lower Township, came into 2022 with a surplus of $8.6 million. As a percentage of the general budget, Middle’s surplus total at the end of 2021 was lower than all the county’s 16 municipalities, except for Woodbine. 
The township has held the line on debt service. In the 2022 budgets of all 16 municipalities, Middle pays a smaller percentage of its annual general fund appropriations in debt service than all but Avalon, Woodbine and tiny Cape May Point. 
The 2022 budget shows 158 full-time budgeted positions in the township with 70 part time. The budget lists direct employee costs of $16.4 million or approximately 66% of the general fund budget. The township has been impacted by the wage inflation caused by competition among the county municipalities for appropriately skilled employees.
Since 2015, taxpayers in Middle have seen their tax rate rise by 15% over the last eight years, their total general fund budget by 19% and the dollar value of their tax levy by 20%. 
The township moves forward with a consistent tax burden. The issue is that its budget shows signs of vulnerability. Next year the federal relief funds will no longer be available. An unfortunate oversight concerning the transition to county-wide dispatch services has left the township with an emergency appropriation that will have to be covered in 2023. The surplus, while rebounding from its pandemic low, is still among the lowest in the county in terms of a percentage of the annual budget.
Although the township finds ways to meet the budget challenges each year. 2023 may be among the more challenging yet.
Have any thoughts and/or information on this story? Email vconti@cmcherald.com.

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