62 °F Ocean City, US
November 4, 2024

3-cent tax rate hike proposed in Linwood budget

By CRAIG D. SCHENCK

Sentinel staff

LINWOOD — “This is the first budget year that the entire budget is being driven by something the state did,” Mayor Darren Matik said March 22 after City Council introduced its 2023 budget. “We started this budget process with the intention of keeping taxes flat. Unfortunately we were not able to do so strictly because of the health benefits insurance cost.”

After several years of flat municipal taxes in Linwood, the tax rate is set to rise by 3 cents under the 2023 budget. The $14,036,554 spending plan is up $464,537 over 2022, an increase of 3.4 percent.

According to a presentation by City Councilman Matt Levinson, major factors driving the increase are group health insurance costs (+$243,687), statutory costs including pensions (+$134,273) and shared service expenses (+$51,589).

Matik said Gov. Phil Murphy’s administration negotiated a 3 percent increase for state employees and then “passed 24 percent down to local employees.”

“It’s really the additional cost that drove this entire tax increase. This council over the years has done everything it can to be frugal, to share services and to do more with less,” Matik said. 

The tax rate would rise to 97.6 cents per $100, amounting to an increase of $30 on each $100,000 of assessed value. The local debt tax rate would remain at 2.2 cents.

Mainland Regional High School introduced its budget March 20 calling for a 1.6-cent rate increase in Linwood.

Levinson said the finance committee worked diligently to keep cost down, including keeping operating budgets the same for police, fire and public works. Salaries and wages, however, are increasing for all three department.

Police salaries would rise $172,970 to $2,108,784, fire salaries would rise $10,266 to $398,000 and public works salaries would rise $28,496 to $535,103.

The City Clerk’s Office would see an increase in salaries and wages of nearly $4,000 but a decrease in its operating budget of nearly $20,000.

Salaries and wages in the Tax Assessor’s Office would rise slightly to $79,503 and its operating budget would remain flat at $14,680.

Finally, the Construction Office would see a roughly $3,000 increase in its salaries but an $11,000 decrease in its operating budget.

The city is looking to increase its capital budget for at least the second straight year. Figures dating to 2021 show a capital budget of $75,000, rising to $650,000 in 2022 and $1.225 million for 2023.

Helping to offset the tax increase is a steady rise in ratables. The city’s taxable base was $930,606,100 in 2021 and is at $934,385,300 for 2023, an increase of $3,779,200. Levinson said that was due to fewer successful tax appeals and an increase in real estate values.

The city had 71 successful tax appeals in 2020, resulting in a direct loss of $4,484,400 in ratables and $159,465 in revenue. Those numbers fell to 14 appeals in 2021 for a loss of $3,214,300 in ratables and $47,069 in revenue. In 2022, there were only four successful appeals for a loss of $376,900 in ratables and $20,567 in revenue.

A strong tax collection rate has helped the city. It was 98.77 percent in 2020, rising to 99.04 percent in 2021 and falling slightly to 98.98 percent in 2022. That is significant because the city must fund the school district and pay the county at 100 percent regardless of how much it collects.

As is the case in most municipalities, the school budget makes up the largest portion of a tax bill. In Linwood’s case, it is 39 percent. The regional school tax makes up another 20 percent of the bill while the municipal tax makes up 26 percent and the county tax 13 percent. School debt and the library tax make up 1 percent apiece.

Levinson said the city attempted to switch insurance carriers but got no response from vendors.

“No one would price us out so we were pretty much stuck with what we have, but we will continue trying,” he said.

Council President Eric Ford commended the finance committee for its efforts.

“Matt really tries to uncover every dollar that there is to uncover,” Ford said. “When you think about the task that they had in front of them, it could have been very easy to mail it in but they didn’t. This team works hard every day.”

City Council also introduced a $1.225 million bond ordinance during the meeting. Levinson said the city intends to purchase a firetruck, which would take up about 60 percent of the funds, as well as conduct about $400,000 worth of road repairs.

Levinson said plans to upgrade recreational amenities at All Wars Memorial Park with lights and possibly a turf field are still being developed. He said some engineering work would take place this year but that budgeting for even a downpayment on what may amount to a $2.5 million project was untenable given the increased health care costs.

Related articles

Ocean City police chief to retire

OCEAN CITY – Police Chief John J. “Jay” Prettyman announced his retirement last week after a 32-year career in law enforcement.  Prettyman, 52, has been chief since February 2019, after serving for a year as acting chief.   He worked as a seasonal officer in Ocean City for two years and as a full-time officer in […]

BOEM: Final impact of Ocean Wind 1

FEIS assesses the effects on whales, tourism, skyline and much more Editor’s note: See related letter from multiple groups to Ørsted’s CEO. The letter, with addendum, is available here. OCEAN CITY — The federal Bureau of Ocean Energy Management’s Final Environmental Impact Statement (FEIS) on the Ocean Wind 1 offshore wind farm released Monday is […]

Leave a Reply

Your email address will not be published. Required fields are marked *