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The Herald and The Lantern

Wednesday, September 24,1S80 DA VO BOYD

The Avalon Proposal There's a controversy bubbling in Avalon, and local residents and taxpayers are taking sides But the issue centers around a subject which should be of concern to all of us here in Cape May County, regardless of which of the 16 municipalities we call home (or summer At issue is whether the Borough Council should commit the citizens to a *2.3 million expenditure for the purchase of just under 3 acres of prime back bay real estate. The governing body has proposed acquiring the fend and water rights to establish a public marina park, renting the slips to help pay off the purchase price and maintenance costs. • THIS IS NOT A MATTER of dollars and cents, Cmincil President Philip Judyski opined last week. “The question is do we want multiple dwellings or open space?’' There is, of course, a matter of money involved in the controversy, but borough officials claim the cost to taxpayers would only amount to some 3.5 cents per *100 of assessed valuation more in taxes. The property is said to be worth *4 million. The Council has attempted to gauge public opinion, even going to the time and effort to conduct a man poll of property owners That, in addition to listening, to the pros and cons expressed at the past several Council meetings and work sessions. There’s another one this Friday night. IT IS NEARING THE TIME for Council to act, and their action will no doubt please some residents and taxpayers, and annoy others. - The idea of spending local taxpayers' money (even though state funds are being sought too) to pay fair market value for land to keep it open is an idea whose time is long overdue in Cape May County. Perhaps it is only fitting that it occur in one of the Cape’s more affluent municipalities. ' ‘ But it is a fact of political life which will eventually be seen in other areas of the Jersey Cape, hopefully, as more concerned public officials realize the short - and long-range value of keeping open space open. The Avalon proposal even has the bonus of being a revertue-producing facility while remaining an undeveloped state. WHEN THE FACTS ARE CONSIDERED — especially the keeping of unwanted development away while at the same time receiving revenue-producing open space — the answer seems obvious: The Avalon Borough Council should give the go-ahead to purchase the parcel for the benefit now and in the future of Avalon residents. And, officials and citizens in other Jersey Cape municipalities should learn a lesson Irom the Avalon experience: The time is coming when they too may be called upon to act on the'public purchascof land — whether it be for scenic parks or badly needed downtown parking space. It’s no longer just oceanfront land to keep beaches public or sand dunes

intact

WE’VE LEARNED THE HARD way that ratables aren't all they were cracked up to be; ihat they more often than not bring with them more government expense than tax revenues. Hopefully we will realize, less painfully, that to keep government expenses down over the long haul will sometimes require immediate

expense — and open space.

THE SOVBKIGN STATE of Aff AMS

WHAT DO YOU JHIT* Of THt PHSIOJNT S NCW ECONOMIC KXICY?

GEE I REA11V UKE IT «UT . THEN...

I UKED THE OTHEd FIVE HE HAD BfFOKE THIS ONE. TOO

dU

Money Matters

‘Muni’ Spells Tax-Free Money

by Vbice Fulglntti Muni’s (municipal bonds) are tax-exempt debt obligations issued by nearly every conceivable political subdivision to finance the wide variety of public necessities. Many of these items - such as roads, sewers, schools, hospitals, parks and dams - have a very long useful life and the total cost of these projects couldn’t and shouldn't be paid by current users. In order to finance large public projects by spreading the payment over many years, the state, county or other special purpose authority borrows money from you by issuing bonds. The issuer promises to pay both principal and interest for the loan of the

money.

SO FAR THIS isn’t much different from lending money to Uncle Sam or IBM, but the interest you get on U.S. Treasury bonds or corporate bonds isn't tax-exempt. Why? The difficult sounding concepts

of reciprocal immunity and dual sovereignty provide a practical solution to a serious problem If your city had to pay the interest rates to borrow money that everyone else does, guess how much your basic package of property taxes, sales taxes and other charges would have to be

increased.

Under reciprocal immunity, as long as the federal government doesn’t tax the activities of the state and local governments, similarly local authorities won’t tax post offices, military bases or other U.S. government property in their jurisdiction. The federal government and local governments as a result of this mutual exclusion retain their dual

sovereignty.

ON THE WHOLE, municipal bonds feature a safety factor second only to U.S. government bonds. Since you pay no federal taxes on the interest income, The result is a

higher net return. To illustrate, currently an •*AA” rated 10-year municipal bond is yielding 7.15 percent while equally rated corporate bonds of the same maturity yield 11.5 percent. If your tax bracket is 40 percent, divide the municipal bond rate by (1 - your tax bracket). TTnis EffecUve Yield equal .0715 divided (1-.40) equals 11.9 percent. The answer shows that you would have to find an 11.9 percent yield in a comparable taxable investment to equal the same net yield from the tax free investment.,, ADDITIONAL safety for municipal bond investors in the form of insurance provided by some issuers is available. The American Municipal Bond Assurance Corporation (AMBAC) and The Municipal Bond Insurance Asociation (MBIA) insure the payments of principal and interest. The nationally

recognized rating service, Standard I* Poor’s, rates bonds insured by MBIA as ‘•AAA” and AMBAC insured bonds as ”AA." For issues not insured by these companies, MGIC Indemnity Corporation will insure individual portfolios for investors. ALTHOUGH municipal bonds usually are issued in $5,000 denominations, there are alternatives available to investors with as little as $500. The alternatives include open-end municipal bond funds, unit trust, taxexempt money market funds, or even individual issues selling at a discount. We have not been able to cover the whole range of information you may desire on municipal bonds, but we will continue to look at additional features in our next column.

Vince Fulglnltl, a Wildwood resident, is an account executive with a leading investment broker.

Hopefully, All You Call This

CAPE MAY lit 4 ■V furalfl Emtv P.O.toxO INm C»rp»r«H— Avalon. MJMW1 John H. An«lru« II Editor WIIII«.J.Ad~» Ad^rll.ln, Director , Dorroll Kopp Pubhther eHono M7-U1S tor Hmwt or AihrortUInf Information DCADUNIS ~ Now* k Photo* Thur*4*oy Advertising Friday - J p.m. CloMltlad Advertising

The People Will he Heard ‘ by Richard D. Rodgers After weekend conversations with several out-of-town taxpayers relative to the purchase of ground in Avalon for an additional park, I feel serious concern for the inequities that are evident in the mailed opinion poll. There arc people who have received no ballot, there are people, fortunate enough to own more than one property, who have received two ballots for each property. There are questions regarding duplication and verification of

ballots.

There is much confusion in the stated tax rate increase. Will the cost to taxpayers be 10 cents per $100 of assessment of 3'y cents per $100. What is the effect on the rate if a decision is made to permit the proposed development? WHILE THE INTENTION of the poll has much merit, it cannot and must not be the solp basis for a decision. Our summer neighbors who live out of town freely admit that they art not familiar with local issues. We, the permanent residents, the voters, live with these issues every day. There are such problems as the recent government change and the reasons for it. the sewer plant problems, the condition of streets and rapid condominium and townhouse development in other areas of Avalon which is in contrast to the stated purpose of this land purchase. THE TOWNPEOPLE HAVE reason to be cautious. Th" errors of the past haunt us. We must get our priorities in

order.

The Mayor’s office has its poll of the taxpayers, the Homeowners Association is conducting a poll, the Chamber of Commerce has asked its members for comment. Why can't the voters, who share the Council’s responsibility in this decision by having elected them to office, have a group opinion expressed? IF A REFERENDUM IS not possible or practical, then let me suggest yet another poll; a poll which would be mailed to the voters. Let the response be anonymous thus eliminating the local political, financial, social and employment pressure which may influence a signed opinion. When the results of all of the polls are analyzed, we will have the basis for a thorough review. I express my sincere hope that the decision on this matter will be made with due consideration of all of the people of Avalon, not just the special interests.

Planning? by Helen Legerson What is happening to Sea Isle City? What kind of a Planning Board do we have? And Mayor Roffa, the ‘overseer’ of the town? Everywhere you look, condos and duplexes are being built on lots and on top of existing buildings. I believe in progress — but enough is enough. OUR STREETS ARE BEING choked with cars. We used to enjoy walking the boardwalk and going to the concerts, but gave that up due to lack of parking space. Just to drive to church and home is frustrating. And group rentals. They are a disgrace. It is one big party for them from Memorial Day to September. Everyone I talk to is disgusted, even some summer visitors, with the traffic and noise. IT ALL BOILS DOWN to making money. I call it greed, for the ones responsible for making Sea Isle City what it is today — like a zoo. Wait until next summer, the streets will be one big

parking lot.

All I can say is Thank God for September. Helen Legerson is a 68th St. resident.

Richard Rodgers, a Fifth A ve. resident, terms himself a concerned taxpayer.

"I Don’t UncWfstond Why Yoo ra So Down On Carter Ha'* In Favor Of EvaryfNng... '