CAPE MAY – Jules Rauch, speaking as a representative of the Cape May Taxpayers Association, urged Cape May City Council Dec. 17 to consider two potential revenue streams that would lessen the burden on the property tax rate.
The first would come from an increase of the municipal occupancy rate from the current 2% to the state maximum allowable 3%.
Almost 200 municipalities across all 21 counties take advantage of the optional tax which is an addition to the state occupancy fee and sales tax.
Of the 195 participating municipalities, six charge less than the maximum allowable 3%, Cape May City being one of them.
Rauch claimed that moving from 2% to 3% would realize $700,000 in new city revenue.
Opponents argue that only two municipalities in Cape May County utilize the optional municipal tax, the other being Middle Township, and raising the rates may put the city at a competitive disadvantage with tourists.
The second revenue stream identified by the Taxpayers’ Association would result in interest income from night sweeps of all cash balances in city accounts into interest bearing accounts at a bank, with the return of the funds each morning.
Rauch stated that the city does do some account sweeps, but that the practice could be more comprehensive resulting in added interest revenue for the city.
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