UPPER TOWNSHIP — The first thing most visitors to the area notice when they cross the bridge over Great Egg Harbor Bay and see the B.L. England Generating Station is the smokestack belching emissions from the power plant’s coal and oil boilers.
Local residents, however, have seen something else entirely for more than half a century. They see low property taxes that make this township an affordable place to live.
B.L. England’s uncertain future is a threat to those low taxes. Should the plant close, township residents could see their property taxes rise dramatically, services cut and the local economy hurt by the loss of jobs.
Hosting a power plant in New Jersey means tax relief, almost $6.2 million last year for the township from the state’s Energy Receipts Tax. The tax dates to 1884, when it applied to telegraph lines. Public utilities were added in 1919, and the take for hosting the infrastructure rose from 2 percent to 7.5 percent in 1955.
So B.L. England is a cash cow. It saved the township from having to institute a local-purpose tax until three years ago, and it’s still one of the lowest in the state at 9.4 cents for each $100 of assessed value. The owner of a $300,000 home paid $282 in local property taxes last year.
For decades, the plant supplied so much money that it was funneled over to the local school system, keeping those taxes low, though that is no longer the case. And in recent years, the township has complained about the state skimming money from the Energy Receipts Tax.
Now, however, complaints about skimming are being replaced by a bigger concern: The tax relief could disappear entirely. The plant owner, Rockland Capital Cape May Holdings, is under a court order to reduce its pollutants by 2016, but its plan to do that by converting to natural gas took a hit when the state Pinelands Commission voted earlier this year against allowing a 22-mile pipeline to go through the national reserve.
Mayor Richard Palombo is very concerned.
“In the old days, they operated the entire township off that money,” Palombo said. “Under the formula, we should be getting $10 million or $11 million, but it’s been raided. We get $6.2 million. I don’t know what we’d get if the plant closes. Potentially, it’s a $6.2 million loss.”
The loss of B.L. England could multiply the township tax rate by four. The local budget in 2013 was $11.7 million, with $6.2 million coming from energy taxes. The amount raised in taxes to support the budget was just more than $2 million. If taxes were used to make up the difference, they would go up to $8 million, bumping up the tax rate to 38 cents. The tax bill for that $300,000 home would go from $282 to $1,140.
That’s assuming no adjustments are made. Township Chief Financial Officer Barbara Spiegel said such a scenario is based on keeping all municipal services and labor forces intact. She does not see that happening. Spiegel said there are still a lot of “what ifs” to consider.
“If the bottom drops out, I couldn’t see the number of employees and services staying the same,” Spiegel said.
Money could still flow despite a closing. Some towns still get some money if they host a defunct power plant. It could be up to the state Legislature. It may also depend on what Rockland Capital does with the land. Representatives with Rockland Capital did not return repeated phone calls for this story.
The impact could go beyond tax revenue. A plant closing would eliminate about 65 jobs, some held by local residents, and spending in the local economy by plant workers. Palombo said even those who don’t live in the township spend in the township.
Charles Hill, of IBW Local 210, which represents 45 of those workers, said they have very good jobs. With overtime, some workers bring in six-digit annual salaries.
“They’re good quality, technical, good-paying jobs. Unemployment goes down here in the summer, but they are not good long-term jobs that supply stability to families,” Hill said.
Steve Humanick, the shop steward for International Brotherhood of Electrical Workers Local 210, said about 25 percent of B.L England workers live in Cape May County.
“These salaries go back into the communities and the schools,” said Humanick, a Middle Township resident who has worked at the plant for 25 years.
Humanick said the 65 jobs don’t include contractors called in to work on the plant or all the businesses that cater to it, ranging from companies that supply pumps to the railroad workers who deliver Appalachian coal for the boilers.
Construction of the $90 million pipeline was also expected to supply jobs, and Rockland Capital was planning to spend $400 million converting the plant to gas. Once converted, the plant would more than double its output and operations would increase, which could also benefit the local economy.
Revenue from property taxes could also go down. Rockland Capital paid $360,365 in taxes last year, and most of it came from the power plant and not the land. The land is assessed at $3.1 million while the improvements are assessed at $22.1 million.
Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said a new use for the land could generate more taxes. The land totals 368 acres overlooking the Great Egg Harbor Bay, and Tittel notes it includes boating access to the ocean, proximity to Ocean City and Atlantic City and is close to a major highway.
“The size of that site and the value of the waterfront would be a ratable 10 times more and would create a lot of jobs. They can make more money building condos and a yacht club than a power plant,” Tittel said.
If the 447-megawatt plant can’t get natural gas, it remains unclear whether it could still burn coal and oil. One of the two coal boilers has already been shut down. One coal and one oil boiler are still running. State Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, argues Rockland Capital can get a waiver from clean-air standards to keep operating with coal and oil. Rockland Capital has previously talked about converting the coal units to oil or installing pollution control measures to lower emissions.
Tittel, who is fighting to close the plant over clean-air issues, said his group would sue if the plant tries to convert to oil. Tittel believes the benefit of cleaner air is not to be discounted.
“I think there are people in Ocean City who would pay $6 million to get rid of that smokestack,” Tittel said.
While gas is cleaner burning than coal or oil, Tittel said the plant would produce more pollution because output would increase and the plant would operate more days per year.
Contact Richard Degener: