CAPE MAY COURT HOUSE — Cape May County is proposing a $138 million budget that includes a tax increase that is mostly traced to a continuing loss in property values and higher medical insurance costs.
The budget, set for introduction at a Board of Chosen Freeholders meeting this afternoon, would carry a tax rate of 20.44 cents for each $100 of assessed valuation. The rate last year was 19.26 cents. It was 18.2 cents in 2011.
The budget is actually down in dollars from $139.1 million to $138.3 million, but the amount being raised by taxes is rising from $94.6 million to $96.5 million, a 2 percent increase.
For years the freeholders were able to keep the tax rate stable due to a rapidly increasing ratable base. Chief Financial Officer Francine Springer said the ratable base has declined by 15 percent, or about $8 billion, since 2009. Springer said the ratable base declined by 4.3 percent last year, to $47.2 billion. The loss accounts for about 85 percent of the 1.18-cent tax-rate hike.
Freeholder Director Gerald Thornton said medical insurance costs, up about six percent to about $29 million, are another factor. He said some relief is on the way. The state has mandated higher contributions by employees, which have already kicked in for non-union workers and are being added as new union contracts are negotiated.
“It’s going to be ratcheted up significantly for longtime and higher-salary employees,” Thornton said.
Money the county makes on investments is way down, as interest rates have nose-dived. The county made $2.7 million in 2007 but last year pulled in only $97,662.
“I’ve talked to the banks and it’s not going to get any better,” Springer said.
The low rates, however, help the county when it borrows money, such as the $34 million it is bonding to renovate the county jail and refurbish some roads.
The tough budget times are also forcing the county to use more of its surplus. Springer said historically 50 percent of it was used for the budget each year, but this year 53 percent, or $10 million, is being used.
The tax increase could have been higher. The budget has already been pared by $838,000 in operating expenses, bringing it down to about $70 million. The original tax-rate increase was set at 1.91 cents, Springer said. The original budget exceeded state caps but the latest spending plan is below the caps.
There remains concern that some positions funded by grants may have to be cut. One layoff notice has already gone out and as many as 15 positions are threatened if the grants, most from the state and federal governments, don’t come through.
“The county policy is if the grant ends, the employment ends,” Thornton said.
Thornton said it is a budget of tough choices, including cutting $50,000 off the $150,000 normally contributed to Historic Cold Spring Village, a Lower Township tourist attraction.
“We’re at a point now where we have to make some very difficult decisions. A lot of things would be nice to have, but we have to provide services that are required for the health, safety and welfare of our citizens. That’s where we are,” Thornton said.
Thornton said the food stamp bill (the county pays about one-third of the costs) is up 20 percent in the last couple years, with many people receiving aid for the first time in their lives.
The county has used attrition to cut costs, with total positions down from 1,027 in 2004 to 993 today. The budget includes only one new hire and sets salary and wages at $44.9 million, the same as last year.
One bright spot is fees the Clerk’s Office brings in from sources such as real estate transfers. They rose last year. They peaked at $9.9 million in 2005 but were down to less than $4 million in 2011. They rose to $4.7 million last year.
“They went up $800,000, which is incredible. It was a great help in these tough economic times,” Springer said.
Thornton is worried about grants, especially those that help the elderly with meals and transportation. He said such problems are “basically keeping them from going to long-term care” facilities.
The capital budget has also been reduced from $2.6 million to $1.8 million.
The budget is still subject to change, as Springer said she is still waiting for some state figures to come in.
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