OCEAN CITY — Ocean City taxpayers will see a 3.76-cent increase in the tax rate if the proposed 2025 municipal budget is approved later this spring. It is the same increase taxpayers faced in the 2024 fiscal year budget.
Ocean City Chief Financial Officer Frank Donato handed out copies of the proposed budget at Thursday evening’s Ocean City Council meeting but did not speak about it. He will be doing a budget presentation at the next council meeting.
The $124.6 million spending plan both raises revenues and expenses by just under $5.5 million.
The local tax rate would rise 7.04 percent under this budget, going to $0.5716 per $100 of assessed valuation from this year’s rate of $0.534, an increase of 3.76 cents.
The budget would raise $74 million through taxes, slightly under (by $16,949) the 2 percent levy cap under New Jersey law.
That is an increase of just shy of $5.8 million from last year.
The budget again benefits from increased ratables — adding another $174.8 million over the past year. The value of property on the island now stands at $12.949 billion.
The 2025 budget expects to use $5.5 million in surplus, some $500,000 less than this year’s budget. That would leave another $4.9 million in surplus untapped.
State aid is expected to drop $223,844 to $2.17 million.
Salaries and wages are up $1.72 million from this year.
The owner of an average home valued at $650,000 would pay $3,715 in municipal taxes compared to $3,471 this year, an increase of $242.
The Cape May County Board of Commissioners announced the county budget would include a tax decrease this year of 1.9 cents per $100. If the county budget is approved as it, the tax rate would fall from 18.8 cents to 16.9 cents per $100. The rate has fallen since 2021, when it was 23.4 cents per $100.
During a budget presentation at the Ocean City Board of Education meeting Thursday evening, Business Administrator Timothy E. Kelley said the school district’s budget would increase the tax rate by a half-cent to 20.04 cents per $100, costing the average homeowner another $32.50. The average tax on an Ocean City home would be $1,326, Kelley said.
The municipal budget plan expects a slight increase in beach tag fees, from $5.8 million to $5.9 million, and a slight decrease in parking meter revenue, dropping $100,000 to $3.9 million.
Aquatic and Fitness Center fees are even at $1 million, smoke detector inspection at $130,000 and boat ramp fees at $25,000. Airport fees are down $10,000 to $150,000 and emergency medical services up $75,000 to $700,000.
Interest on investments is anticipated to climb $450,000 to $1.45 million after the city realized $1.923 million in 2024.
Debt service climbs $1.82 million to $23.56 million.
The library tax rises $700,000 to $7.7 million. The amount dedicated to the Ocean City Free Public Library is a percentage set by the state. In the municipal budget, the library returns more than $3.8 million of that to the city.
Some revenue items that were in the 2024 budget but not anticipated in the 2025 budget are a $3.5 million FEMA grant to elevate structures; $4.86 million for boardwalk preservation from the American Rescue Plan; $3.74 million additional from the American Rescue Plan; $193,000 from the opioid settlement fund, and $120,000 from the Clean Communities Program.
The budget also includes 3 percent increases for the mayor and City Council members. When it doubled the salaries for mayor and council members after the pay was static for so many years, the resolution added a cost of living adjustment going forward so there would be no need to vote on future resolutions on wages. The mayoral salary rose from $40,000 to $41,200.
Salaries and wages for the police department rise just under $100,000 to $10.3 million; for the fire department, up $267,000 to $8.63 million; for the lifeguard division, flat at $2.1 million.
Contributions to the city’s pension systems are up $440,000 to $9.775 million. That includes just under $5.4 million for the police and fire retirement systems; $2.135 for the public employees retirement system; $310,000 for lifeguard pensions; and $1.75 million for Social Security.
Insurance costs continue to climb. General liability insurance was up $215,000 to almost $700,000, an increase of more than 31 percent; worker’s comp insurance up $260,000 to $2.07 million, an increase of 14.4 percent; and group health insurance up $560,000 to about $8.4 million, a jump of 7.2 percent.
Electricity costs were expected to rise 20 percent to $900,000 and up $75,000 to $575,000 for street lighting.
– By DAVID NAHAN/Sentinel staff