Raising Cape May Occupancy Tax is Not the Answer

Several years ago I wrote an article about how reducing the occupancy tax in Cape May would be a good thing. It would save tourists millions of dollars. The real estate lobby would never allow that to happen. Now, though, years later raising Cape May occupancy tax is not the answer to solving the city’s budget shortfall.

That is one of the solutions presented by one member of the Cape May Taxpayers Association at last week’s council meeting. It didn’t age well. Councilman Shaine Meier became incensed.  And rightfully so. The councilman’s reaction was unprofessional.

He should apologize.

The general public may not know that hotels and motels must collect 13.625% on top of every dollar of room rate collected. Through October of 2020, the city collected $1,494,400.23 in its share (2%) of the Sales and Occupancy tax. Translating into $74, 720,000.00 dollars of revenue spent by people visiting Cape May.

People staying overnight in Cape May have to eat, drink and shop. They need to be appreciated, not penalized. The visitors to Cape May rallied mid-pandemic. Our city collected $242,175.00 over projections in the months of July, August, and September.

All the Taxpayers

The Cape May Taxpayers Association website states they have one mission: “To hold accountable any and all governmental entities which raise and expend public revenues within the City of Cape May.”  Every hotel, motel, and bed, and breakfast is owned by a Cape May taxpayer.

The TPA website also lists “To preserve and protect the interests of Cape May’s Property Taxpayer,” as their founding purpose. Instead of trying to gouge more money out of visitors to Cape May, the TPA might be better served looking inward.

There are many ways they can be the watchdog of Cape May finances. Raising taxes is not one of them.

Perhaps the TPA could lobby Governor Murphy to find a way to collect tax on whole-house rentals. Something the previous New Jersey Governor offered to think about but never acted on.

Not if but when?

Of course, there are always two sides to every argument. Raising taxes is ultimately up to the governing body. However, raising occupancy tax in a year affected by pandemic conditions would be poor timing.

The efforts of the Taxpayers Association would do well to question why there was a $6500.00 repair to sound equipment in Convention Hall. Convention Hall has not been used regularly throughout the pandemic.

Convention Hall–as-built is an example of TPA effort.  A facility which on opening day was outgrown without a usable kitchen facility for today’s modern caterers. The construction plans of Convention Hall were modified to satisfy the critics of the spending plan.

It is budget time in Cape May. Consequently, last week’s council meeting was the time for City Manager Mike Voll to introduce the budget to the governing body. As reported by the Star and Wave Voll’s budget will be around $32.1 million dollars.

The tax rate will increase by one cent. Meaning it will go from 36.3 cents to 37.2 cents per $100 dollars of assessed property value.

Of course, all things go up. Salaries, expenses, and costs across the board. Room rates will likely see some increases too.

Understanding the indignation of Councilman Meier, not excusing it. Now is not the time to be discussing raising Cape May occupancy tax.