SOMERS POINT — Rising employee health insurance costs and police and fire pension obligations are driving a proposed 8.36-cent increase in the municipal tax rate in Somers Point.
The proposed increase is nearly double that of any in the past decade. According to Sentinel archives, the municipal tax rate was 83 cents per $100 in 2014, rising 4.4 cents in 2015, 2.5 cents in 2016, 4.3 cents in 2018, 2.43 cents in 2019, 3 cents in 2020, 2 cents in 2021 and 1.7 cents in 2022. Data for 2017 was unavailable.
The 2023 increase would amount to $83 on every $100,000 of property value, or about $250 on a $300,000 house.
If approved as proposed, the $19,532,652 budget would increase the tax rate to $1.11 per $100 of assessed value. That would amount to a 28-cent increase, or 34 percent, over 10 years.
On March 23, City Council introduced the spending plan, which is up $447,567 over 2022.
Revenues include a tax levy of $12,709,253, up about $80,000 from 2022, and $6,823,399 from surplus, miscellaneous sources and receipts from delinquent taxes.
Appropriations include $6,873,150 in salaries and wages, up about $85,000 from 2022, and $1,915,000 in group health insurance. The police and fire retirement system cost is up $190,739 to $972,034.
City Councilman Sean McGuigan, who is a member of the budget committee, said group health insurance costs are up $320,000. Combined with the higher pension costs, that’s nearly 4 cents of the increase.
The city plans to use $2,700,000 in surplus, leaving $178,169. Other revenues include more than $1.1 million from the Department of Transportation, $973,782 in energy receipts taxes, $255,000 in construction code fees, $200,000 in hotel fees, a $125,000 bayfront preservation grant and $125,000 recreation grant.
The city expects to receive $215,290 from Shore Medical Center and $131,608 from Bayview Court. Last year Shore Medical Center made a $250,000 donation on top of its bed tax, but McGuigan said there is no guarantee of receiving that again. If received, it could be used to lower the increase by more than 2 cents.
Auditor Leon Costello, who works with many municipalities in Atlantic and Cape May counties, introduced the budget.
“This year has not been a great year for most towns,” Costello said, adding most towns are seeing a 3- to 5-cent increase.
He said there is a short list of contributing factors but each is significant.
A penny is worth $114,600 in tax revenue. Costello said the lack of a donation from Shore amounts to more than 2 cents, pension increases another 2 cents, health insurance 3 cents and salaries coupled with reserve for uncollected taxes makes up the rest.
“You’re not alone,” Costello said. “Towns that typically don’t have any increase at all have an increase.” A public hearing and final vote on the budget are scheduled for April 27 at City Hall. The meeting begins at 7 p.m.
By CRAIG D. SCHENCK/Sentinel staff
