Taxpayers Association Critical of Cape May Budget

CAPE MAY — Taxpayers Association of Cape May Vice President Dennis Crowley was critical of the 2010 budget approved by City Council April 21 claiming the city has ignored the recommendations from the association.
“This budget is deeply disappointing to us as an association,” he said.
Crowley said the taxpayers association appeared before council in October 2008 with a presentation entitled “Funding the Future.” The presentation looked at the demographics of Cape May, the need for continuing city services, operating under state budget caps and the looming costs of a new Convention Hall. The association suggested changes in procedures for budgeting to stem an increase in the percentage of property taxes used to fund the city’s budget.
Crowley said in 2006, property taxes accounted for 42 percent of revenues for the city while the 2010 budget has 51 percent of revenue coming from property taxes. He said it was beginning to accelerate in the wrong direction.
City Manager Bruce MacLeod said there were few other towns in the county that used as little as 51 percent from property taxes to support their budget.
As far back as 10 years ago, the taxpayers association was asking the city to find new revenue sources. Crowley said the 2009 and 2010 budgets did not follow any of the association’s recommendations.
He said he did not see anything to fund the upcoming operating costs of a new Convention Hall.
“We’re beginning to lose hope and faith that somebody listened to us two years ago and that somebody really does care about the way this town raises funds to support itself,” said Crowley.
He said if the city continues in its current pattern, it would not be able to services residents want. Crowley said the city was “whistling past the graveyard,” with the 2010 budget, avoiding the things that scare it.
Mayor Edward J. Mahaney Jr. said he did not forget the association’s presentation in 2008 and the 2010 budget showed some movement toward segregating the costs of certain services to the people that use them, businesspeople, residents or tourists. He said there was some overlap in users.
Mahaney said he proposed last year the establishment of a tourism utility to pay off the debt service and operating expenses of a new Convention Hall plus tourism expenses in general. He said very difficult decisions were ahead if the state imposes a 2.5 percent cap next year on municipal tax levy increases which could affect police, fire and rescue services.
The mayor said the city has been conservative in spending, not adding new debt service until old debt service is retired. He said in the last two years, the city has eliminated eight or nine jobs by attrition.
Employees are being cross-trained for additional duties, said Mahaney.
Crowley said the association was not in favor of cutting jobs, He was critical of small cuts in the city budget, “$6,000 here and $20,000 here, pardon the expression but that’s rearranging the chairs on the Titanic,” he said. “We’re missing the bigger picture.”
He said public discourse has not begun on creating new sources of revenue. He said that process could not begin one month before the new Convention Hall opens.
Mahaney said the city made a number of smaller cuts to the budget to compensate for a $95,000 loss in state aid.
Crowley said examining the city budgets since 2006 shows property taxes have risen 29 percent and local revenues have decreased 6 percent.
City Council approved the 2010 budget in a 3-1 vote with Councilwoman Linda Steenrod casting the negative vote. She said she still had some unanswered questions about a tourism utility and how it would be funded as well as discretionary spending.
Deputy Mayor Niels Favre was absent.
The budget included 2.5-cent increase in the local purpose tax rate but the tax rate is actually decreasing due to revaluation of properties.
The reval increased the assessed value of properties in Cape May from $2.2 billion to $2.7 billion. The local purpose tax rate will reflect a 4.3-cent decrease, lowering the rate per $100 of assessed value from 32 cents to 27 cents.
A property with an assessed value of $500,000 will pay $138.50 in local purpose taxes to the city.