Stafford Leader

Stafford’s 1-Cent Tax Helps Acquire Open Space and Pay Off Associated Bonds

Oct 12, 2018
Photo by: David Biggy While most public parks within Stafford Township have been acquired utilizing Green Acres grant money, some properties over the years have been bought by the town to create open-space buffer zones, such as the two next to the entrance of Lighthouse Park in Ocean Acres.

As the fourth quarter of the year approached, Stafford residents likely saw that one dreaded statement arrive in their mailboxes – the township tax bill. Well, for those who don’t bother examining every word and number on it, you have the option to read further. But for those who pore over such details, you may have noticed over the years that Stafford Township collects an open-space tax from its resident base and has been doing so for quite a long time.

“I don’t remember the exact year, but we may have started the open-space tax sometime in the mid-’90s,” said Stafford Mayor John Spodofora. “I’ve been part of our government for 30 years, and the open-space tax goes back a long way, probably close to 25 years.”

Many in town likely have an understanding of where some of the open spaces are – the Doc Cramer Sports Complex, Ocean Acres Park and Manahawkin Lake Park might be at the top of the list. And while most parks and recreational spaces definitely are designated as open space, almost all of those properties were acquired with other funding, specifically the Green Acres federal grant program of Ocean County’s Natural Lands Trust.

To be clear, those acquisitions have nothing to do with the town’s open-space tax. And that leads to questions: What is Stafford’s open-space tax, what is it used for and why is it on your tax bill? For those answers, Township Administrator James Moran has the answers.

“This is the open-space tax in a nutshell – it’s tax revenue we collect to acquire properties to be preserved as open space and it’s used to pay back the bonds to acquire those properties,” he said. “Open space is preserved land that will no longer be used to build upon, and the object of acquiring that open space is to limit residential construction and keep taxes down.”

Back in the mid-1990s, town officials apparently foresaw the need to prevent urban sprawl, especially given Stafford’s size and proximity to Long Beach Island. In short, at one time Stafford had a lot of space that could be developed over time. Creating buffer zones of open space was a way to minimize the amount of residential construction within the town’s borders.

“A bunch of Rutgers (University) studies were done, because New Jersey is such a high-tax state, about the effects of ratables on the tax rates in a town,” Moran said. “And a lot of people think the more ratables you have, the lower taxes will be, and that’s not necessarily true. It depends on the type of ratables. Residential ratables actually don’t reduce taxes. Residential properties increase school taxes and the need for public services, which ultimately drives the tax rate up. Limiting residential construction is a way to keep taxes from rising too much.”

Hence the development of the open-space tax, which is a 1-cent tax on every $100 of assessed property value. The average property owner generates some $30 per year in open-space tax revenue for the town, and that revenue is funneled through the town’s general fund and dispersed to various accounts to pay for the bonds used to acquire open-space properties.

In 2001, a referendum was passed by voters to create a trust fund that is used for the acquisition of and payments for open space.

“When the town wants to buy a property for open space, the open-space tax is our guarantee that we will pay back the bond,” Moran said. “The money in the open-space trust is already spoken for – it’s already going somewhere to pay off what we’ve acquired over the years.”

Many of the open spaces in town were acquired a decade or more ago – before Moran was hired as administrator in 2009 – but several large spaces had just been finalized for acquisition as he moved into town hall that July.

Earlier that year, four parcels totaling some 99 acres along the western side of Route 72 near the Atlantic Hills development were purchased for approximately $1.9 million. Another 19 tracts totaling just under 157 acres in the Beachview section of town were bought for about $5 million.

“Those were the last acquisitions made for open space, but that’s almost $7 million we’re paying for with the open-space tax,” Moran said. “When you figure in the interest on those bonds, that’s a hunk of change we’re paying back.”

In all, the town has some 209 tracts of land on its Recreation and Open Space Inventory – the official register kept within any municipality that lists the properties maintained as open space. Once a property lands on the ROSI, it is no longer deemed buildable in most instances. If a town desires to do some sort of building on a ROSI property – and the limitations are extensive – “it almost takes an act of God ,and it takes forever to get approval to do it.”

A few other examples of the lands acquired through the town’s open-space program include a pair of spaces near the entrance to Lighthouse Park in the Ocean Acres section of town acquired in 2005 and 2006, as well as a tract along the east entrance to Lighthouse Park from Sandy Circle.

Some of the additional properties acquired through the open-space program over the years are really small – such as a pair of 20-by-100-foot lots in an area known as Evergreen Heights – and others are huge, upward of 70 acres. Many of these properties already have been paid for since the development of the open-space tax.

For 2018, Moran said the town has collected about $416,000 in open-space tax revenue. Some years, such as the several years following Superstorm Sandy when the township council opted to lower the open-space tax to a half-cent, the amount collected has been significantly lower.

Nonetheless, whatever comes into the fund in a given tax year is immediately earmarked to go right back out.

“These properties have bonds attached to them, and like every other bond you have to pay it over time. Most land bonds are between 20 and 30 years,” Moran said. “And as long as the bonds have to be paid, we will keep the open-space tax in place.”

Of course, theoretically that means – should the town not acquire any more properties for open space, and there aren’t many more left to get in Stafford, according to Moran – the tax should go away at some point.

“Once those bonds are paid off, the tax should go away,” he said. “That still could be 10 or 15 years from now. The only other reason it would remain in place is if the town decides to build that fund in the case there is some piece of property somewhere it wants to acquire and doesn’t want to bond for it. That’s certainly a possibility.”

— David Biggy

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