Proposed Lower Township budget raises tax rate 6 percent - pressofAtlanticCity.com: Lower Cape May

Proposed Lower Township budget raises tax rate 6 percent - pressofAtlanticCity.com: Lower Cape May

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Proposed Lower Township budget raises tax rate 6 percent

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Posted: Friday, February 22, 2013 4:13 pm

LOWER TOWNSHIP — Officials are blaming a loss in ratables traced mainly to a decline in real estate values for a proposed 2013 budget that would increase the tax rate by more than 6 percent.

Township Manager Mike Voll is proposing a $25.9 million budget that would increase the tax rate from 44.3 cents to 47.2 cents for each $100 of assessed valuation. The 2.9-cent increase would raise taxes by $29 for each $100,000 of assessed valuation.

The average residential assessment is $259,500 and this would produce a municipal tax bill this year of $1,225. The average resident assessment in 2012 was $261,100 and carried a tax bill of $1,157.

Mayor Mike Beck said three-quarters of the tax increase is due to successful tax appeals that reduced the ratable base by $23.5 million to $4.072 billion, a 0.6 percent decrease.

“Three quarters of the tax hike is due to the economy. If we get the same revenue as last year ,we’d be down to a half-cent increase,” Beck said.

The good news for residents is that Beck feels the township is in good shape for the future. There was no tax increase in 2010 or 2012, and just a 1-cent increase in 2011, as the township reduced full-time staff from 144 workers to 129 workers through attrition.

“We saw this coming,” Beck said.

The township also reworked union contracts to make them more taxpayer friendly. Starting pay for police declined from $47,000 to $33,000, while Public Works went from $42,000 to $30,000. Step guides were adjusted so it takes more years to get to the higher pay scales.

Beck noted worker contributions for health care and pension are also increasing and the full impacts from this will be seen in the coming years. Township Council decided recently to hire its own engineer to save on engineering costs.

“A downturn forces us to raise taxes but the future looks good. We’re putting changes in our economic structure that will serve us for years to come,” Beck said.

Besides the ratable decline, some other impacts from a stagnant economy are seen in the budget. The tax-collection rate declined from 97.86 percent to 97.21 percent. This was a factor in anticipated surplus declining by $440,000 ,or almost 21 percent, and forced the township to put more money, another $384,000, into the reserve for uncollected taxes.

“If somebody doesn’t pay their taxes we still have to pay the county and the schools. We had to put more in reserve for this,” Beck said.

Fees coming into the construction office, another barometer of the economy, declined from $330,000 to $250,000.

The proposed budget, which faces a public hearing and council vote on April 1, totals $25.95 million, up from $24.53 million for an increase of $1.41 million, or just under 6 percent. The taxes raised to support the budget are going from $18.13 million to $19.22 million, a 6 percent increase.

State aid is stagnant at $1.5 million, the same amount as 2012. Other major revenues include using $1.7 million from surplus and $1.1 million from delinquent taxes.

The largest appropriation is salary and wages at $9.85 million, a $222,641 increase, though Beck noted it had been over $10 million in 2010. The budget includes the hiring of an engineer and one new police officer. Beck said a $1.4 million increase in appropriations is somewhat misleading because about $600,000 of this is state grant money.

Contact Richard Degener:

609-463-6711

RDegener@pressofac.com

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