Council OKs Budget With 1 Percent Tax Levy Increase

City Council on Thursday gave final approval to a $71 million municipal budget that taxes property owners by 1 percent more in 2013 than in 2012.

While Ocean City taxpayers on average will pay just 1 percent more in taxes next year, who pays more and who pays less will depend on whose property assessments were changed. Through a regularly scheduled program of reassessments to areas where assessed values don't reflect market values, tax appeals and storm-damage reassessments, Ocean City's ratable base fell by about 7 percent this year. To collect roughly the same amount in taxes, the tax rate climbs by more than 8 percent.

Owners whose properties were reassessed (on average) will pay less in taxes (as the decrease in their property value will more than offset the rate increase). But owners whose properties were not reassessed will pay more in taxes.

The bottom line for taxpayers: an increase of 2.98 cents (or about 8.38 percent) on the tax rate. That means taxpayers will pay an extra $29.80 in taxes for every $100,000 worth of property. The owner of a $500,000 home will see an increase of $149 in municipal taxes (not including school taxes or county taxes).

Ocean City's overall ratable base falls from $12.2 billion to $11.3 billion.

The new budget represents a $2.2 million increase over last year's $68.7 million budget. But because projected local revenues (largely from parking, construction code and Aquatics and Fitness Center fees) increases by $2 million, the budget increases the tax levy (about $43.7 million for 2013) by just $458,000 (1.06 percent).

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See a copy of the complete 2013 introduced budget (a copy of the final approved budget will be posted with final changes on Friday, May 17, at ocnj.us/Finance).
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Tax levy and tax rate detail from the introduced budget are as follows:

A number of small changes to the introduced budget were made before final approval at Thursday's City Council meeting at the Ocean City Free Public Library. 

The most significant: The hiring of a new director of a reorganized Department of Community Operations allowed the elimination of an engineering position and produced a savings of $50,000. 

"The budget that you will consider adopting tonight is sound and fair to the taxpayers," Mayor Jay Gillian said in a written statement. "It maintains the same level of services that our residents, property owners and visitors expect and enjoy. It's a responsible plan for this year, and positions us nicely for the coming years."

City Council approved the budget in a 4-2 vote with Keith Hartzell and Pete Guinosso dissenting.

Guinosso said he's "not happy with the budget," that the city's infrastructure is neglected and that a proposal to reduce Ocean City Fire Department expenses should be considered. But when City Council President Michael Allegretto asked him what specifically he proposed changing in the budget, Guinosso said only that he wants to see no increase in taxes.

Hartzell pushed for a symbolic transfer of money in the budget as a show of faith that the city administration would consider an alternative Ocean City Fire Department staffing model that he and Councilman Scott Ping had proposed 18 months ago. Hartzell and Ping had suggested the city use lower-paid EMTs to replace firefighters doing EMT work. 

Gillian had already committed to a "thorough review" of public safety staffing with input from all seven City Council members. But Hartzell pushed for a show of "commitment" with a transfer of money from a Fire Department wages and overtime account to an emergency rescue services account.

"Just try it," Hartzell said of his staffing plan. "Try it on a small scale. Give us something."

Hartzell ultimately proposed a budget amendment to transfer $20,000 to the rescue services account. The amendment needed four votes among the seven-member council to pass.

Hartzell, Guinosso and Michael DeVlieger voted yes. Antwan McClellan and Allegretto voted no. Anthony Wilson abstained. Ping, the potential fourth vote, was absent from the meeting. The amendment failed.