CAPE MAY POINT — Borough Commission passed its 2025 budget April 9, calling for a 1.7-cent increase in the local tax rate.
The $2.4 million spending plan is up $1,009 from the previous year and the tax levy is up $104,000 to $1,808,088.
The budget raises the tax rate to 36.5 cents per $100 of assessed value. The increase amounts to $17 for every $100,000 or a total municipal tax of $1,460 on a $400,000 home.
“The two biggest components are the money being appropriated for improvements to Borough Hall as well as tax map updates,” auditor Michael Garcia said. “That equates to $160,000 in increases, and the other increases amount to $4,000.”
The 1.7-cent increase in the tax levy funds the $164,000 increase in total spending.
The levy increase will raise $104,000, but to bridge the $60,000 gap, Garcia said the rest is being covered by a fee increase on beach tags to generate extra revenue and use more surplus.
The borough completed 2024 with a surplus of $594,787, of which Garcia said 43 percent, or $254,000, will be used to balance the 2025 budget. Garcia noted that the money used for the surplus will be built back up based on projections to end the year again at $594,000.
The biggest spending increase is in salaries, wages and retirement benefits, which make up 34 percent of the budget. That line item increased by $52,486 to $721,098.
Capital projects make up 17 percent of the spending plan, followed by police service at 14 percent, uncollected taxes at 3 percent and debt service at 3 percent. Garcia said all other areas represent 29 percent of total spending.
Municipalities are required to stay within the two state-mandated caps, and Garcia noted that the budget is $29,835 below the spending cap and $261,000 below the tax levy cap.
The tax collection rate for 2024 was 98.97 percent, which Garcia said equates to all but $21,000 collected by Dec. 31, 2024.
“Delinquent taxes are a very small piece at 1 percent left to collect,” he said. “In 2025, we’re estimating about $61,000 will be uncollected.”
Garcia noted he expected the borough would do better than that amount, but collecting at a rate higher than what is anticipated for uncollected taxes is one way of regenerating the surplus.
Garcia noted that the water and sewer utility budget has the borough using $152,000 of the $249,000 surplus, and it is less likely that it will be rebuilt in the utility.
“At some point in time we’re looking at a needed fee increase in water sewer,” Garcia said. “That’s probably something we’ll discuss at least for next year.”
Garcia said most of the spending on water and sewer expenses is water purchases from Cape May and Cape May County Municipal Utilities Authority sewer charges.
Borough commission passed an ordinance to exceed the municipal budget appropriation limits and establish a cap bank. Garcia noted that all municipalities can increase their budget appropriation by 2.5 percent unless an ordinance is passed to allow an additional 1 percent.
“This ordinance allows the borough to appropriate up to 3.5 percent more than you did last year,” Garcia said. “The amount you’re below that 3.5 percent increase gets banked for the next two years.”
Garcia said the borough is almost $30,000 below the spending cap, and the money will be banked should the need arise to spend the additional money.
“The way inflation has been the last three years, this cap ordinance is more important than ever,” Garcia said. “You don’t know what prices are going to do, so it’s very important this ordinance gets adopted.”
Deputy Mayor Elise Geiger asked if the proceeds from a borough property sale were in the budget. Administrator Ed Grant said the property was sold after the first of the year, so there is an additional $130,000 on the books.
Geiger said the commissioners should follow the money to see how it will be treated and used and, once the budget was passed, devise a strategy for doing so.
Garcia said it could go directly to surplus or to the reserve fund.
Mayor Anita VanHeeswyk thanked Garcia for all the work he had done on the budget.
By RACHEL SHUBIN/Special to the Star and Wave
