SOMERS POINT — Without comment, City Council unanimously adopted a budget with a tax rate increase nearly double that of any in the past decade, driven by rising employee health insurance costs and police and fire pension obligations.
The $19,532,652 spending plan requires a tax rate increase of 8.36 cents to $1.11 per $100 of assessed value. The increase amounts to $83 on every $100,000, or about $166 on an average-assessed home of $200,000.
The municipal tax rate has increase 28 cents, or 34 percent, over the past 10 years. According to Sentinel archives, the 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.
The archives contained no information for 2017 and the links to the information on the city website, somerspoint.gov, failed to connect.
Auditor Leon Costello said April 27 that the budget had not changed from the one introduced March 23, 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, told the Sentinel in March that 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.
During public comment, resident John Helbig, who is chairman of the Somers Point Environmental Commission and a member of the Planning Board and Economic Development Advisory Commission, asked Costello whether he expects more of the same next year.
“Given the magnitude of the tax increase, do you see this as an anomaly or is this going to be a recurring situation?” Helbig asked.
Costello, who has decades of experience working with multiple municipalities around southern New Jersey, said in all likelihood it would be a one-time thing. He said the combination of the increase in health benefits and pensions with the potential loss of a $250,000 gift from Shore Medical Center forced the increase.
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.
Other taxes
Property owners will also see an increase in their local and regional school tax rates but a decrease in the county rate.
The Board of Education adopted the Somers Point School District’s $22,668,282 budget for 2023-24 on April 27.
The spending plan includes a 2 percent tax levy increase coupled with staffing cuts, according to a presentation by Superintendent Michelle CarneyRay-Yoder and Business Administrator Mary Conroy.
The local school tax rate, which had remained steady at 98.4 cents since 2020-21, would increase 1.9 cents to $1 per $100 of assessed value. That amounts to $19 more for each $100,000 or $38 more per year on a home assessed at the average of $200,000.
The Mainland Regional High School Board of Education also approved its $31,445,153 budget for 2023-24 on April 27, calling for a slight tax increase in all three sending districts.
The spending plan consists of a $19,642,254 general fund tax levy, $3,338,269 in fund balance and $8,185,924 in state aid.
It requires a tax levy increase of $347,309, or 1.8 percent, over the previous budget. The total allowable by law without voter approval is 2 percent.
Taxpayers in Somers Point would see their rate rise .2 cents to 74.3 cents per $100 of assessed value, or an increase of $2 on every $100,000. The total regional school tax levy in the city by the bay would be $8,520,292.
That’s a total rate increase of 10.46 cents from the city and two school districts.
However, the Atlantic County Board of Commissioners adopted its $256 million budget April 18 that includes a 2.2-cent decrease in the general purpose tax rate.
The amount to be raised by taxes is $172.6 million. Appropriations include $85.9 million in salaries and wages and $170.2 million in other expenses.
The tax rate will fall from 46 cents to 43.8 cents per $100. That means the owner of a house assessed at $300,000 would pay about $1,314 for basic county services, down about $66 from last year.
The drops the tax rate increase in Somers Point to 8.26 cents, or about $163 on a $200,000 home.
By CRAIG D. SCHENCK/Sentinel staff