AVALON - Borough Council voted 5-0 Wednesday night to approve a $24.8 million municipal budget, setting the local purpose tax rate at 22.4 cents, which is a half-cent increase from 2013.

The increase means the owner of the average home assessed at $1.3 million will pay $65 more in real estate property taxes in 2014, Tax Assessor Jeff Hesley said Thursday. Currently, the average Avalon homeowner pays about $6,500 a year in property taxes.

The municipal budget increased by $522,000, an amount made possible through the borough's ability to bolster its ratable base by $42 million in the last year. Hesley said as many as 50 new houses have been constructed in Avalon, an island resort where 82 percent of properties are single-family homes.

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"Higher assessments come from the brand new homes," Hesley said. "The older homes, the ranchers and the bungalows that were assessed at $20,000 or $30,000, come off the books and the 3,500-square-foot, five-bedroom homes at $750,000 to $1 million replace them."

Although Avalon suffered less damage from Hurricane Sandy in October 2012 than shore towns to the north, the impact of the historic storm is being felt in the town, Hesley said, as homeowners are responding to new elevation rules and soaring insurance premiums. Many owners of older homes with first floors below base flood elevation, which is BFE+3 in Avalon, are tearing down their substandard properties and replacing them with newer construction, he said.

"Because of Sandy, the flood rules have come to the forefront," Hesley said. "Where a lot of first floors are below flood level, people are finding that to raise their houses, they're spending as much to rehab as they would to build new."

Consequently, Hesley said, the combination of new construction along with his vigorous defense of tax assessment appeals has resulted in a robust increase in the borough's ratables. At $7.37 billion, Avalon has one of Cape May County's largest ratable bases.

The amount to be raised by taxation in the 2014 budget is $16.3 million, with more than $3 million in surplus to be maintained in the budget.

Capital projects to be funded by the 2014 budget include $650,000 for paving along Fourth Avenue and a redesign of the 28th Street parking lot; $350,000 sand back passing project underway to add sand to north-end beaches; $750,000 for back-bay dredging and wetlands restoration, and $490,000 for improvements at the 39th Street playground.

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