Cape May Lowers Tax Hike

Cape May lowers tax hike by using more surplus funds
By RICHARD DEGENERStaff Writer, (609) 463-6711
Published: Thursday, February 9, 2006
Updated: Thursday, February 9, 2006

A little over one hour and taxpayers save $45.72.

That's what the figures indicated after Manager Luciano Corea and City Council met this week to pare the proposed tax increase from 1.9 cents for each $100 of assessed valuation to a 1-cent hike. The budget, which has already been introduced at just over $13 million, will be amended after the public hearing to reflect the changes.

In January when the tax-rate increase was at 1.9 cents it was expected to cost the owner of a $508,000 home, which is the average assessment here, $96.52 more in local-purpose taxes this year. A penny increase would only cost $50.80 more. Thus the savings of $45.72.

“The increase is 13 cents a day,” Mayor Jerry Inderwies said.

Most of that savings was achieved by funneling more surplus into the budget, about $244,000, and not hiring a new police officer. Corea and Councilman Jerry Gaffney worked on the spending plan before the meeting and came ready to negotiate.

Gaffney had a plan to eliminate a tax hike completely by using more surplus, hiring fewer new workers, reducing money in 2006 for capital projects, and other cutbacks. His plan would have reduced funding for Washington Street Mall improvements and a new convention hall from $3 million to $1.5 million, though it would have been made up in future years. He wanted to investigate closing the police substation in West Cape May. Gaffney also questioned individual line items including police computers, storage buildings, new windows for City Hall and a front-end loader.

There wasn't any support to reduce funding for the mall and convention hall. This was ultimately increased from $3 million to $5 million, though it's bonded so only part of that money impacts this budget.

“From a tourism standpoint we all believe the mall and convention hall have to be attacked aggressively to solve these issues,” Councilman David Brown said.

Inderwies said the police substation is used 24 hours a day, seven days a week, but he was willing to put off hiring a new police officer. Corea said this would save $36,000. Corea came up with another $20,000 in cuts bringing the total to $56,000. With the additional $244,000 from surplus the rate was cut by almost one cent.

“It goes from 1.9 cents to 1 cent, a 47 percent decrease,” Corea noted.

Gaffney expressed special concern about health-insurance costs, which are at about $1.7 million for active and retired workers.

There was no talk of cutting a salary hike for council members. Corea said he budgeted in a $2,000 increase for the four members of council.

“Council would go from $8,000 to $10,000. The mayor would stay the same at $15,000,” Corea said.