Despite Smaller Tax Levy, Some Likely Will See Tax Increases

City Council began work Wednesday night on preparing a budget for the 2012 fiscal year with a presentation on anticipated revenues.

Mayor Jay Gillian's administration delivered some good news with its proposed budget. An anticipated return to taxpayers of $720,000 from the Ocean City Free Public Library and a $250,000 increase in beach tag revenues will more than offset a $241,474 increase in proposed spending (an increase of just 0.35 percent on a $69 million budget).

That means Ocean City will have to collect less money from taxpayers next year than they did this year. The local tax levy decreases by 0.49 percent from $43,373,538 to $43,160,426.

But because there will be less property value to tax next year, the local tax rate will go up.

The total assessed value of property in Ocean City fell by more than $681 million in 2011. The decrease in the ratable base is the result of 650 successful tax appeals in 2011 and about 3,000 reassessments completed by the city.

The reassessments were done in areas where assessed values were farthest from market values — including high-end properties on the beach and bay, and also some of the low-end "condotels" (motels converted as condos), according to Finance Director Frank Donato. 

Ocean City has more than 19,000 taxable properties, and the city would like to continue its reassessment work pending approval from the Cape May County Board of Taxation.

The bottom line for taxpayers: an increase of 1.66 cents (or 4.91 percent) on the tax rate. That means taxpayers will pay an extra $16.60 in taxes for every $100,000 worth of property. The owner of a $500,000 home will see an increase of $83 in taxes.

The owners whose properties were reassessed (on average) will pay less in taxes next year.

The library budget — according to a century-old formula for all New Jersey towns— is determined by a percentage of a town's ratable base. But because the Ocean City Free Public Library is completing some of its financial obligations on the recent renovation project, it was able to return a substantial amount of money to the city.

Beach tag revenues are projected to increase based on the first full year of sales under a $5 price increase for seasonal tags.

City Council's continue 6 to 8 p.m. tonight (Thursday, Feb. 16) in Council Chambers on the third floor of City Hall.

Click on the PDF icon with this story to see budget detail.