OCEAN CITY — The city made a lot of money last summer, entering this budget cycle with a record surplus of more than $10 million, but the city’s finance experts told the city council not to count on it every year.
City chief financial officer Frank Donato, accompanied by auditor Leon Costello, presented city council with a detailed picture of the proposed $88.8 million budget on Thursday. The budget is ready to be presented at the next board meeting, Donato said.
After that, it would be ready for a public hearing and a final vote 28 days later, Costello said. In the form of government of Ocean City, the city administration proposes the budget every year. The board can approve it as is or make changes to it.
Spending is up in the budget proposal, but the tax rate is the same as last year, at 47.2 cents for every $100 of assessed value. This would mean that the owner of a property valued at $500,000 would have to pay $2,363 in municipal taxes, in addition to school and county taxes.
The average estimated property value in Ocean City is over $600,000 and climbing, Donato said at the meeting, but the city still uses $500,000 for comparison. He said market values had increased further, but the estimated value was lagging behind the rapidly growing market.
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These increased values helped keep the proposed municipal tax rate steady, Donato said. Over the past year, the city’s assessed value has soared by $174 million, bringing the city’s total value to over $12 billion.
This is the highest total valuation in Cape May County. In fact, it’s one of the highest total assessed values in the state, putting Ocean City under $1 billion of much larger communities such as Hoboken and Jersey City, according to data released by the State Department of Community Affairs.
After the 2020 downturn caused by COVID-19, the city had an exceptionally strong summer in 2021, generating $2 million more revenue than expected. This includes $4.2 million in beach fees and an additional $3.44 million in parking revenue.
“Everything was running at full throttle,” Costello said. “We’re not going to make that much money in the future. It’s going to be hard to beat those numbers. »
The budget surplus is the result of a combination of low expectations and a big gain. Donato and Costello expected things to remain strong this summer, but told the board not to expect record surpluses every year.
Those surplus numbers also helped cut taxes, with the city recommending using $5 million in this year’s budget and keeping the other half in reserve.
Last year, Donato recommended not using the excess to reduce a tax increase of about 1 cent on the rate per $100 of assessed value. At this point, he said, using more surplus would have been a gamble. This year, it makes sense, he says.
“Once the proof is in the pudding, then let’s reward the taxpayers,” Donato said at the meeting. “Now we have it in black and white. It’s at the bank. Now let’s give the money back to the taxpayers and enforce that zero budget.
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