N. Wildwood Blames Health Care Costs for 3.8-Cent Tax Rate Increase

NORTH WILDWOOD – Municipal Auditor Leon Costello told North Wildwood City Council that there would be a lot of “scary news” around Cape May County this budget season as towns deal with rising health care costs.
Costello’s comments came as North Wildwood prepared to introduce its 2023 municipal budget, which includes a roughly 3.8-cent tax rate increase.
North Wildwood introduced an approximately $36.8 million 2023 budget, which is about $1.5 million more than 2022. Costello said this scenario will be repeated around the county as towns attempt to deal with a 22% increase in the cost of health care insurance passed along by the state. Costello said the tax rate increase was about 1-cent above a normal tax rate increase. All things considered; however, he said the increase wasn’t terrible.
“You weathered the storm pretty good,” he said.
Costello said despite having a higher-than-normal tax rate increase, the town was still in good shape. He said North Wildwood was applying a little more fund balance (surplus) to the budget – $242,000 above 2022 – but stressed that the city’s finances were in good shape.
He said the budget is under all the state-mandated caps, and the city’s tax collection rate is almost 100% (99.89%). Costello said a lot of towns are having trouble getting their budgets under the caps, although some exceptions have been approved considering the increases in health care and pension costs.
Rosenello said this year’s budget was difficult to work out.
“This is the most difficult budget I have ever dealt with as mayor,” he said.
Rosenello said he has been mayor for 10 budgets, adding that a municipal budget is different from a household budget.
“With a household budget, you deal with it month-to-month. We deal with it all in one shot,” he said.
Rosenello said a municipality must anticipate regular increases in health care, pensions, salary and wages, etc., some of which can change substantially.
He said with a household budget, the changes in the budget items are normally incremental. He said municipal costs always go up, but the administration and governing body try to keep tax increases low. He said zero tax rate increases tend to result in a higher tax rate increase the following year.
At the same meeting, the city hired a new employee who will be shared by the tax office and the city clerk’s office. Rosenello said this employee would replace two full-time employees. When asked about a perceived trend of replacing fewer employees, Rosenello said there is more than one factor at work.
“In some cases, the new technology allows for fewer employees,” he said.
Rosenello said the city is always looking at ways to consolidate jobs and reduce spending. He said between salaries and wages, plus pensions and health care, those costs amount to about 50% of the 2023 budget.
He said the barrier islands are unique in terms of salaries and wages. He said North Wildwood has about 110 year-round employees, and between the extra police, firefighters, public works, and recreation employees, that number grows to about 225 in the summer. He said the increases in the minimum wage have also led to increased costs.
“We had a minimum wage of $8.65, and now it’s $15,” he said.
He said many of those who are now being paid $15 per hour are not the primary wage earner, or it is not their primary job. He said out of the 75-member North Wildwood Beach Patrol, many are teachers who return to their primary job at the end of the summer.
“Now, you are paying $15 per hour to a 16-year-old,” he said.
The North Wildwood budget will be considered for final adoption after a public hearing March 21 at 10 a.m.
Contact the author, Christopher South, at csouth@cmcherald.com or 609-886-8600, ext. 128.