Atlantic County executives are preparing to file a case against New Jersey State. That’s if legislators pass a bill to reduce the amount of property taxes the nine casinos in Atlantic City are needed to pay in 2022.
Atlantic County, home to the resort town, receives 13.5% of the payment-in-lieu-of-taxes (PILOT) paid by Atlantic City casinos every year.
The PILOT arrangement, agreed upon between the casinos and New Jersey in 2016 in response to five casinos closing between 2014 through that year, determines how much the resorts will accumulatively pay in taxes. It is dependent on the previous year’s total gaming revenues generated by the casinos.
A current effort in the Trenton capital seeks to do away with online sports wagering and iGaming revenues from the calculation. If the bill passes and is signed by New Jersey Governor Phil Murphy (D), who expresses support for the measure, Atlantic City casinos’ 2022 property tax allocation would be reduced from about $165 million to $110 million.
Ever since the PILOT was initially passed, long-serving Atlantic County Official Dennis Levinson has been in disagreement with state executives. He claims efforts to help further the casinos will come at the expense of county taxpayers. This week, Levinson stated that if the PILOT amendments pass, the country will be ready to sue the state.
The independent New Jersey Office of Legislative Service (OLS) projects that doing away with online sportsbook and iGaming revenue from the property tax calculation will save the casinos $30 million to $50 million annually through 2026 PILOT’s termination. That is together with the estimated $55 million in saving in 2022.
Levinson suggests the state and casinos should uphold the terms they agreed upon in 2016. The New Jersey Senate and Assembly are expected to discuss the PILOT legislation on Monday.
OLS forecasts that Atlantic County will get $17.5 million next year if the PILOT structure is revamped instead of around $20.8 million. Levinson says the county’s roughly 270,000 residents should expect the county to miss out a minimum of $5 million annually in the years ahead.
“The proposed changes to the PILOT prioritize the interests of the state, casinos, and Atlantic City to the detriment of Atlantic County taxpayers,” Levinson claimed in a letter to Murphy. “How can these residents be so easily ignored?”
Levinson asks Murphy only to sign a PILOT amendment requiring Atlantic County to receive its entire property tax allocation under the legislation’s initial formulation.
Assemblyman Vince Mazzeo (D-Atlantic County), the State and Local Government Committee chair, refused to take up the PILOT legislation when it reached the committee. As a result, the bill was moved to Appropriations for action. Mazzeo argued that such an effort would lead to fewer tax revenues for the county.
Outgoing Democratic state Senate President Stephen Sweeney, one of the PILOT amendment supporters, recently made a huge claim. He said that about four Atlantic City casinos could be on the verge of closing if there are no adjustments to the PILOT.
Although he did not give any specific data to back up that statement, the old adage, “As Atlantic city goes, South Jersey goes,” has prompted some state legislators into supporting the PILOT effort.
However, Levinson says Sweeney’s casino closure statement is a “preposterous assertion.”
Levinson opined, “This money is just to the casinos’ pocket. That’s what it comes down to: it’s a money grab.”
The casinos contend that their businesses are still swaying despite record gross gaming revenue figures from the COVID-19 impact. Joe Lupo, Casino Association of New Jersey President, claims that the casinos have “paid our fair share” in property tax since 2016.
Last Updated on by Ryan