WEST CAPE MAY — Residents can expect a small tax decrease this year due in part to the sale of the borough’s first liquor license.

A Borough Commission budget work session Wednesday night culminated in a preliminary budget of $2.17 million. Borough Auditor Leon Costello said the tax rate would be 33 cents for each $100 of assessed valuation, down from 33.1 cents in 2013.

“It’s down one-tenth of

1 cent or $1 on a $100,000 home,” Costello said.

The $615,000 garnered from the 2012 sale of the liquor license was put into a fund for tax relief. Residents voted 416-125 in 2008 to use the money for this purpose.

The $45,000 used this year is the difference between a tax increase and a slight decrease, since each penny on the tax rate equals $45,100, Costello said. The $45,000 used last year was about two-thirds of the 1.5-cent tax-rate decrease.

Chief Financial Officer Frank Donato said the fund should last another 10 or 11 years, but that doesn’t include money from a second liquor license the borough is authorized to sell. The first was for a package store while the second is for a restaurant operation.

Selling the second license could double the years the fund provides relief. After Wednesday’s budget work session, Borough Commission voted to take bids on the second license with the minimum bid set at $525,000. There was debate on setting the minimum, with a range of ideas from $500,000 to $650,000.

A liquor license is a limited commodity in the region, as Cape May and Lower Township have used all theirs and neighboring Cape May Point is a dry town.

“No other town south of the (Cape May) Canal has one. Lower Township doesn’t have any and there are none in Cape May,” said Borough Solicitor Frank Corrado.

Mayor Pam Kaithern noted the license was offered once before with a $650,000 minimum and there were no bidders.

“We didn’t get south-of-the-canal numbers. I don’t want to go so high people don’t even think about it,” Kaithern said.

The mayor said having the first restaurant in the borough that serves liquor would help all the other businesses in town.

“Then let’s move forward,” said Commissioner Carol Sabo.

The sale, if a successful bidder is found, will ensure the fund for tax relief will continue well into the future.

The commission spent most of the meeting working on budgeting for the different departments.

The budget, which still faces a public hearing and vote on March 26, totals $2.17 million with $1.5 million coming from tax levies.

The budget offers workers raises of 2 percent with no layoffs and one new part-time hire in code enforcement.

Costello said the borough is in sound financial shape.

The budget uses $300,000 from surplus but still leaves $339,000 in the kitty. The tax collection rate rose last year to 97.1 percent, from 96.4 percent in 2012.

Costello also noted the borough only has $270,000 in debt and will retire this in three years.

The borough, however, will assume new debt in 2014 as it buys a new firetruck for $550,000 and a Public Works vehicle for $55,000.

Costello said the average assessment is $450,000. The tax bill for the average home would be $1,485, down $4.50 from last year.

The budget includes just $89,000 in state aid. It was also helped by an increase in the ratable base of almost $1.5 million.

Costello said the budget is under the state-mandated caps on spending and tax levies.

“I have nothing but good things to say about this,” Costello said.

The budget is set to be introduced Feb. 26.

The public hearing is on March 26 at 7 p.m. at Borough Hall, 732 Broadway.

Contact Richard Degener:

609-463-6711

Been working with the Press for about 27 years.