LOWER TOWNSHIP — Increases in health insurance costs and salaries are pushing an increase in tax collections to support Lower Cape May Regional School District’s proposed $31 million budget.

The effects would vary in the three towns that make up the district. The tax rate would decrease for Cape May and West Cape May, but increase for Lower Township, under the spending plan that is rising by just more than $776,000.

The increase is somewhat buffered by a rise in state aid, from $9.1 million to $9.38 million, but the amount to be raised by taxes is still increasing by $331,000 to $19.7 million.

The amount paid by the three towns in the district is based on a state funding formula that takes into account property values and student enrollment at the elementary and high school levels. The formula is recalculated every year.

This year, residents in Lower Township would see their tax rate go up by 1.7 cents for each $100 of assessed value. Taxes would decline by 6.2 cents in West Cape May and 1.1 cents in Cape May.

“Last year was the opposite. Lower Township had a decrease and Cape May had an increase. This year, because of the way the regional funding formula worked out, Cape May goes down,” Superintendent Jack Pfizenmayer said.

Cape May has been complaining for years about the city’s share of the costs, and City Council recently hired an attorney to study the issue. Earlier this year, the city unsuccessfully tried to convince the Board of Education to bring the issue to voters.

While it can fluctuate from year to year, under this budget Cape May’s share declined from 34.2 to 32.5 percent.

“Their high school enrollment declined from 85 to 65 kids, and that’s part of the formula. If elementary (enrollment) does not go down by the same percentage, less of their ratables go into the formula,” Pfizenmayer said.

Lower Township’s percentage, meanwhile, increased from 57.6 to 60.7 percent. West Cape May’s went from 8.3 to 6.8 percent.

The tax rate in Lower Township would rise from 27.4 cents per $100 of assessed value to 29.1 cents. A home assessed at $100,000 would see the tax bill go from $274 to $291. The average residential assessment in the township is $259,500, which would result in a tax liability of $755.

In Cape May, the rate would go from 24.3 cents per $100 to 23.2 cents. The cost per $100,000 home would decline from $243 to $232. Cape May has much higher property values, however, with an average assessment of $628,863. That produces a tax bill of $1,458.

West Cape May would see its tax rate decline from 30.5 cents per $100 of value to 24.3 cents. A $100,000 home tax liability would drop from $305 to $243. The average assessment in the borough is $400,000, so the tax bill would be $972.

Pfizenmayer said budget increases are being driven by health insurance and salaries. The district is taking part in the state’s School Choice program starting in September, which will generate an additional $220,000 in state aid. The district expects to get 12 to 15 students from other areas. Pfizenmayer said the district could take on 70 students from other towns without incurring any extra costs.

The district is also watching its energy bills as a solar system went on line in January that could reduce electricity costs by 10 percent to 15 percent.

“We haven’t judged its total impact yet,” Pfizenmayer said.

Contact Richard Degener:

609-463-6711