Posted: Sunday, October 2, 2011
Homeowners in most towns in Atlantic and Cape May counties, with spending caps in place and housing values declining, experienced low or moderate property-tax increases this year, an analysis of tax data by The Press of Atlantic City shows.
Property-tax increases from 2010 to 2011 were held to 3 percent or less in 25 of 39 municipalities, or 64 percent of towns in those counties.
A typical homeowner’s property-tax bill actually decreased in four towns — Corbin City, Estell Manor, Avalon, and Wildwood — and stayed flat in Sea Isle City and Woodbine, Press analysis shows.
Tax bills increased by 10 percent in Egg Harbor City — the region’s highest increase — and by 7 percent in Upper Township, where a new municipal purpose tax was instituted. They rose by only 1 percent in Mullica, Dennis, and Lower townships and West Cape May.
The Press used state Treasury property-tax data to calculate the median assessed values of homes in each municipality, then multiplied those values by the overall local tax rates to arrive at a typical homeowner tax bill. Data are not yet available for Cumberland and Ocean counties.
Property-tax bills overall in Atlantic County rose by 3 percent, and rose by 1 percent in Cape May County.
Officials said local governments have responded to the tight economy by cutting costs.
“I think they have all battened down the hatches,” said George R. Brown, Cape May County Tax Board administrator.
A state-mandated cap on municipal, school, and county spending was in place for this year’s budgets. The cap, enacted in July 2010, prohibits spending and the tax levy to increase more than 2 percent unless approved by local voters.
Certain costs, however, are exempt from the cap, including pension and health benefit costs, debt payments, and emergency spending.
Effects of the reeling housing market are evident in the property-tax data, as the median assessed home value declined from 2010 to 2011 in 11 towns in Atlantic County and nine towns in Cape May County. In some places, including Avalon — where tax bills dropped by 9 percent — all property values were reassessed or revalued. In others, lower home sale prices led to property-tax appeals that reduced values for some homeowners.
In Wildwood, the median home value declined from $250,700 to $222,400. Mayor Ernie Troiano said the city lost $220 million in assessed value because of tax appeals.
Troiano said the city has reduced spending and staff, and put off construction work on roads and other infrastructure. But he said a tourist town cannot afford to ignore maintenance needs for long.
“That can bite you a few years down the road,” the mayor said.“You need to fix your streets. Most of our infrastructure is 80 to 100 years old.”
But he said he understood that taxpayers are hurting, so it made sense for the city to put off such costs for now. The tax bill for a typical residential property in Wildwood declined from $4,598 to $4,214, an 8 percent drop.
Galloway Township Manager Steven Bonanni said officials have cut staff, including reducing the police force from 73 to 56 officers, and have pursued shared services agreements to reduce spending.
In past years, the township’s residential base grew at a consistently fast pace. But spending cuts are now being made as home building has stopped and values are deflating. The 2011 median home assessment of $218,700 is $200 less than what it was last year.
A typical homeowner’s tax bill in the township went from $4,310 in 2010 to $4,416 this year, an increase of 2 percent.
Bonanni said local officials are trying to attract more businesses to the area to help spread the tax obligation.
“We’re holding spending down,” he said.
In Egg Harbor Township, the typical property-tax bill increased from $5,266 to $5,405, up 3 percent. Township Administrator Peter Miller said a 20 percent reduction in staff since 2008 was just one of many strategies being employed to keep costs down.
“We’re doing a multitude of things. There’s no one magic bullet,” Miller said.
One example, he said, is that the township refinanced debt from 2002 within the past month, saving about $45,000 a year.
The township has conducted cost-benefit analyses to explore increased efficiency, he said. It considered whether to privatize trash collection but concluded it would be more expensive in the long run. Miller said the township was able to eliminate 11 positions by using an automated trash collection system with a truck that lifts 96-gallon trash barrels provided to residents.
In Cape May County, Brown said property values have declined for various reasons. Selling prices have fallen below assessed value in many towns, especially along the ocean. With home construction stalled in the poor economy, pricey new housing is not expanding the tax base.
And some towns have reassessed or revalued all properties, as did North Wildwood and West Cape May. Tax bills increased by only 1 percent in West Cape May and by 2 percent in North Wildwood.
Brown said local governments and school districts have had to deal with the pressure of rising costs while their tax base is declining.
“I think officials have done their best,” Brown said. “Towns like North Wildwood should be credited for holding the budget line in a year of down assessments.”