Fairness In Taxes

TELL YOUR MAYOR AND CITY COUNCIL THAT WE WILL NOT ACCEPT THESE INCREASES

Spending increases 7.00%
Taxation increases 12.257%
Equivalent tax rate increase, excluding ratables is 12.11%

1ST WARD JODY ALESSANDRINE 391-8598 jodya3@comcast.net
AT-LARGE SCOTT PING 399-0413 scottping2006@yahoo.com
AT-LARGE MICHAEL ALLEGRETTO 432-8739 Michael.Allegretto@prufoxroach.com
2ND WARD GREGORY JOHNSON 457-4764
MAYOR SAL PERILLO 703-7675 sal6767@yahoo.com
AT-LARGE KEITH HARTZELL 399-5324 keithhartzell@hotmail.com
3RD WARD JACK THOMAS 399-9586 jackthomaocnj@comast.net
4TH WARD ROY WAGNER 399-4429 edwinaroyoc@yahoo.com

Below is an article that appeared in the January 18, 2008, edition of the Press of Atlantic City. Mr. Miller’s article is very informative and gives us some thought provoking comments about the presentation of the 2008 Ocean City Budget by Mayor Sal Perillo. There are several statements that need to be commented on prior to our members and taxpayers of Ocean City reading this article.

Because of information given to Michael Miller by the city, he states in the article

“… the city's payroll is increasing by just 4 percent.”

FACT: It is important that you understand that the increase in payroll for fulltime personnel increased more than 6%. This 6% includes pending salary increase of $400,000 that was erroneous listed as a FICA (Federal Insurance Contributions Act) figure rather than being listed as the full time salary number. The pending salary increases are associated with the ongoing contract negotiation with the firefighters union.

“The city plans to eliminate two (2) positions this year in addition to the nine (9) positions cut last year.”

FACT: These nine positions were funded but the positions were never filled. In reality, there were no cuts in personnel associated with those nine positions.

O.C. mayor calls for 12% tax hike

By MICHAEL MILLER
Staff Writer, 609-463-6712

OCEAN CITY — Mayor Sal Perillo spent most of his budget address Thursday touting last year's accomplishments, such as savings with trash contracts and an upcoming beach fill.

He saved the bad news for last — a proposed 12 percent tax hike in his spending plan.

"We already know that 2008 will be a difficult year, not only for Ocean City but for all communities in New Jersey," Perillo said.

Ocean City for the first time in many years saw a staggering drop in equalized property value from $14 billion last year to an estimated $12.5 billion in 2008.

In his eight-page speech, the mayor neglected to mention a few important figures — such as the total budget ($60.5 million) and the amount to be raised by taxation ($42.9 million).

And he fudged the tax impact, declaring in his speech an 8 percent tax-rate hike for 2008. (The tax rate is actually going down this year, thanks to the revaluation.)

The mayor is proposing a tax rate of 34 cents per $100 of assessed property value. This year's property revaluation makes a comparison with last year's tax rate unhelpful. But the tax levy—the total dollars city property owners must pay—will go up by an estimated 12.2 percent.

Perillo blamed several factors outside the city's control for the tax hike. City pension costs are increasing by $700,000 this year. The city must pay the library 15 percent or $500,000 more this year. All told, these factors alone increase the city's budget by more than $4 million, Perillo said.

The mayor touted the island's comparatively low tax rate—36th lowest of 39 towns in Atlantic and Cape May counties by his account. But many residents here pay significantly more in actual tax dollars because of the high value of their properties compared to those in neighboring towns. The city plans to cut two more full-time employees this year in addition to the nine cut last year. As a result, the city's payroll is increasing by just 4 percent.

The city plans to spend $20 million on capital improvements this year using $11 million in grants. One of those projects will provide solar power to four public buildings using $1.6 million in private funds.

The city plans to spend $5 million on roads and drainage and will replace equipment on three playgrounds.

The city will begin construction on a 7,000-square-foot senior center next to the public library. Ocean City also will benefit from an $8.8 million beach-replenishment project to begin in a matter of weeks.

As part of his budget message, Perillo announced several new initiatives. Soon, the city will offer a reverse 911 system to notify residents by phone, e-mail or text message about flooding or other emergencies.

The mayor is launching a tax-abatement program to encourage residents to rehabilitate historic buildings instead of demolishing them.

Cape May County plans to build a new 7,500-square-foot senior center next to the library, which also is expanding.

Under Ocean City's form of government, City Council may set the tax rate and simply let the administration determine how to meet it. But past councils have made specific recommendations about ways to cut taxes, and this year likely will be no different. Various budget meetings are scheduled for later this month.

To e-mail Michael Miller at The Press: Mmiller@pressofac.com

“What, me worry?”

FOR MANY YEARS FAIRNESS IN TAXES HAS SPOKEN AGAINST AND HAS WARNED OF THE DESTRUCTIVE IMPACT THAT THE UNREASONABLE BUDGET INCREASES WOULD HAVE ON OUR COMMUNITY. UNFORTUNATELY THOSE WARNINGS WERE MET WITH CYNICISM AND SARCASM YEAR AFTER YEAR. THE FOLLOWING IS A LETTER WRITTEN BY JIM TWEED, A FIT BOARD MEMBER, AND WAS PUBLISHED IN THE LOCAL NEWSPAPER.

“What, me worry?” I’m beginning to feel like the clueless face of Alfred E. Neuman smiling out from the cover of “Mad” magazine. At least that’s how the taxpayers of Ocean City must be seen by some. The millions of dollars in increases in pensions, health care costs, and contractual salary obligations are being treated as if it’s news. It’s only new if you have not been paying attention for the last 5 years. There have been voices warning us about this for at least that amount of time. They have routinely been dismissed as “pockets of negativity,” “angry,” or some other disparaging remark. After Ocean City’s auditor, Leon Costello’s presentation last Tuesday, those “weirdo’s” now look like biblical prophets.

I wonder if anything will really change. Some will look for people to blame. That’s much easier than finding a solution. It’s also a waste of time. The leader we elected under whose watch all those contracts were negotiated has been gone for more than a year. We even named a new Public Works building in his honor. We’re the ones that look stupid, not him.

It’s the choices we make in the future that will make a difference, not the ones we made in past. But who’s going to step up to make the “tough decisions” that Mr. Costello warned us about. It’s not the professionals’ jobs to do that. They just give us the facts. Our elected leaders decide what to do with them.

Here’s my prediction. No one from the Council or the Administration will step up. Councilmen have learned that those who try the hardest get burned the most. If you try to even talk about the roots of a problem Council chambers will fill with union members, testimony of tearful tales will be touted if meaningful efficiencies are proposed, and Councilmen will be inundated by phone calls from those who don’t want their rice bowls even looked at too closely, let alone touched. Why will this happen? Because it works. The easiest thing to manipulate is peoples’ fears. Of course Councilmen are going to be persuaded that the public doesn’t want any changes in public safety. They’re the ones who show up. The rest of Ocean City is too busy, too tired, too old, or too scared to attend Council meetings. They suffer quietly, maybe show up on Election Day, hope for the best, and go home. After the election they are the easiest ones to ignore.

It’s been over a quarter of a century since “defined benefit” pension systems began to be replaced with “defined contribution” systems. Yet government employees are still on a different playing field than those in the private sector. They still contribute a fraction towards their own health care plans compared with the rest of us. Why? Is it because they work harder than you? Where in the private sector do you ever see anyone stand around to watch someone else work? Is it because their job is more dangerous? Tell that to a soldier serving in Iraq for much less money.

If there’s someone out there, either on Council or the Administration, who’s willing to sacrifice their popularity in order to make tough choices please step forward.

Jim Tweed

Ho, ho, ho, Ocean City, start planning for a tax hike

Required spending forcing city budget to increase

By ERIC AVEDISSIAN, Ocean City Sentinel, 12/27/2007

OCEAN CITY - Increases in pension costs, health care and salaries will affect the 2008 budget and city's tax rate, auditor Leon Costello told city council Tuesday.

Costello gave a PowerPoint presentation on Ocean City's budget at council's workshop meeting, painting a picture of required pension increases and rising health care costs for city employees.

"A lot of this is stuff you didn't do or cause, but these are the facts that you're going to be dealing with as the budget season progresses," Costello said.

Costello said preliminary figures indicate the budget will increase $3.6 million with annual expenses such as health care, pensions and contractual salaries the city won't control. The tax rate will increase 4.7 cents per $100 of assessed valuation with 1 penny equaling $835,000.

Pensions for the Police and Firemen's Retirement System (PFRS) in 2008 will rise to $2.2 million from $1.4 million in 2007, an increase of $759,837.

Pensions for city employees through the Public Employees Retirement System (PERS) will increase in 2008 to $660,558 compared to $375,291 in 2007, a $285,266 increase.

The actual PERS pension costs for 2008 are $825,698. The PERS system factors a percentage of the three highest salary years, making today's pensions a lot more than in previous years. The city's debt service will also rise by $254,250, from $6.8 million in 2007 to $7.1 million in 2008.

Health insurance costs will rise to $5.9 million in 2008, compared to $5.1 million in 2007, a $794,000 increase.

Salaries will increase $1 million in 2008 to $26 million, compared to $25 million in 2007.

The public library will cost $4 million in 2008, a $533,121 increase from $3.5 million in 2007.

According to Costello, local tax levy countywide remained stable around $2.3 million from 1993 to 2003; after that, local purpose taxes spiked from $6.9 million in 2003 to $14.3 million in 2007. "Obviously, this is a trend that is a scary-looking picture," Costello said. "It's a pretty dramatic change that's been happening throughout the county for all the local budgets."

Costello attributed the local tax levy increases to municipalities making pension contributions. He said pension contributions are at 20 per-cent a year and the system s the pensions need for survival are under-funded.

Costello said he predicts $11 million in increases countywide for 2008. He said the range budget increases are now 3 to 5 cents in places where budgets have very little increases.

The city will have to cap spending at 4 percent due to a state budget cap law that goes into effect in 2008.

Costello said ratable increases the city used for tax relief and surplus will decrease in 2008. In 2007, the city had a ratable increase of $254 million, giving the city $1.1 million in tax relief and $1.5 million in surplus. For 2008, Costello projects the city will have a $95 million ratable increase with $444,586 in tax relief, a figure that will not cover the city's salaries and wages. The amount of surplus generated for 2008 is not known at this time, Costello said.

The city increased its health insurance appropriation for 2007, but it wasn't enough, Costello said.

City council will vote on an ordinance Dec. 20 for emergency appropriations for $350,000 to cover a shortfall with Insurance Group Health Insurance in the 2007 budget. He said health insurance will increase countywide by $11 million.

Costello said the more fund balance the city uses in 2008, the less the city will have in 2009.

"If you have less in 2009, you'll not fit into these caps at all and then you're have to make some real tough decisions," Costello said. "What you do with your fund balance is going to be crucial in future years."

Costello said the city can increase revenues to ease the taxpayer's burden.

"Any new revenues you come up with could offset those increases," Costello said.

Council President Keith Hartzell said the city "missed the boat" with new revenues to eliminate tax increases.

"I would challenge all of us and the administration to take a harder look at revenues because it seems revenues are the best way out," Hartzell said. "You don't want to lay people off, you don't want to do without services and the state's basically saying if you create a revenue you can spend it." Councilman Scott Ping said the public wants no changes to public safety expenditures, and echoed Hartzell's concerns with finding additional revenues.

"Year after year the public comes out and says they don't want to make a change with our public safety. I don't know where we can go to make these changes we have to make unless we push for revenues," Ping said. "We have to create a whole new way of thinking in order to keep what we have and still be able to afford it without, taxing our residents out the door."

Mayor Sal Perillo said all municipalities are facing higher pension costs courtesy, of the state Legislature.

"The pension number is as", a result of what the state has, done in the last 11 years. They've done some crazy things in terms of what they've done with the pension system," Perillo said. "I don't want to create an impression that the world is coming to an end in Ocean City. We've all got challenges to face. We all probably picked a bad time, economically to be in office."

Bring Back Reform

By Kimball Baker

Proponents of positive change in Ocean City can truthfully say, to paraphrase Mark Twain’s comment on his premature obituary, that the rumors of reform’s demise in this town are greatly exaggerated.

Not that there isn’t a large kernel of truth in them. Reform in Ocean City is certainly ailing, and it will die if more year-round and summer residents don’t do everything they can to keep it alive. But if you’re a reformer in this town—whether you’re fighting for sensible and humane development, preservation of our history and ecology, or fiscal accountability and responsibility—you now have a good opportunity to breathe new life into your activism.

Reform was not defeated in last year’s mayoral election. There were people in both major camps who favor one or another reform cause. The candidate with a proven reform record garnered a large share of the vote, and other voters favoring positive change may have been attracted by the newcomer’s promises or influenced by matters of purely personal preference.

Time has since shown the true relationship between reform and that election. Reform wasn’t defeated, but the winning candidate and his inner circle have attempted to hijack it. They have tried to divide the forces of reform, to redefine it, or to use it to cloak their administration’s return to “business as usual”.

This outcome has been especially pronounced in the areas of residential zoning, budget reform, and environmental protection. When I looked around Council chambers recently during a Planning Board discussion of the belated and upcoming proposal for a residential zoning ordinance, I was struck by the eerie resemblance of the key players to those who bulked up our housing in the first place. Add to this the dissonance between the nice noises candidate Perillo made about super-sizing in Stenton Place and the weak response to such super-sizing by the mayor and his administration.

The return to “business as usual” shouldn’t shock us all that much. Last year we lived through a mayoral campaign which lacked the one thing it most needed: holding up in front of everyone’s eyes the 10-year record of a city government which placed privilege and profit over the general public welfare, and which developed our neighborhoods at a breakneck pace too often detrimental to the quality of people’s lives.

Neither major candidate focused enough on that record, I believe. Hindsight is always better than foresight, of course, but when the eventually-successful candidate sought the blessing of his predecessor, might we not have guessed that the victor was not going to forthrightly address the problems he inherited? And when the two main candidates spent so much time in bashing each other and in detailed explorations of spurious issues, are we surprised that our community is not pulling together very well?

Since the election, people have debated whether Perillo is some sort of civic do-gooder who just happens to be surrounded by several hard-nosed power brokers, or is a full-fledged member of that grouping himself. Probably the folks with the best answer to that question are members of the Budget Committee and the Environmental Commission who joined these bodies because they believed the mayor’s promise to act on citizen input, then saw their recommendations dumped or disregarded.

The bright spot in all of this is that recent developments throw into sharp relief what we must now confront if we’re to make the positive changes we need to make. It’s clear, for example, that redefining reform as a set of modernization projects, as the administration appears to do, is not enough. Some of these projects are useful, but they compare with true reform as tinkering with a car’s engine compares with rebuilding it.

Too many times, it seems that administration projects are geared towards the housing, eating, and recreational preferences of the super-rich speculators and “players” who occasionally stay at their second or third addresses, and not towards the retirees, other year-rounders, and full-time summer residents who all still make up (cross your fingers and toes!) a vital element of Ocean City existence. (Remember the “residents and retirees” put-down in a previous administration?) It looks like frequent off-island shopping trips and the game known as Find the Restaurant will continue to thrive.

Also coming into sharp relief recently is the arrogance which too often besets our community. Whether this arrogance is bred by hailing from a particular neighborhood, having a certain socioeconomic status, or just being in power too long, it is hampering community togetherness and diversity. The mayor frequently reminds us that supporters of the drive for a new high-school have been a core group of his campaign and administration, and that’s fine. What is not fine, though, is the attitude which often accompanied that drive and which accompanies many recent issues—the attitude of “How could anyone believe differently? We’ve made our case, and we know best. So listen up!” The most effective antidote for this corrosive attitude is a healthy dose of tolerance and a search for the common good.

Reformers, for their part, need to be aware that the time is ripe for renewed effort, that renewal will only succeed if they unite, and that unity must go hand-in-hand with recognition and healing of reform’s self-inflicted wounds. These include reformers (or erstwhile reformers) trimming their sails too closely to the winds of political ambition, the narrowness of some reform efforts, and insufficient development of new reform leadership.

If reformers of every stripe see the present phase of “divide and conquer” for what it is and act accordingly, then divisiveness will fail, and the conquerors will be those in Ocean City whose voices aren’t being sufficiently heard or heeded.