ATLANTIC CITY — The city introduced a $206 million budget Tuesday with the first municipal tax decrease in a decade.
The proposed budget, the first since the state took over the city’s finances in November, is more than $35 million less than last year’s and reduces the municipal tax rate by 5 percent, city and state officials said.
Mayor Don Guardian presented the budget to City Council, which unanimously voted 7-0 to introduce it at a special meeting. The city will hold a public budget hearing May 17.
Among the largest cuts, the proposed budget reduces public-safety spending by about $8 million, debt service by $6 million and administration costs by $5 million. Other savings come from privatizing trash pickup, payroll and vehicle towing services, officials said.
The audience applauded when Guardian announced the tax decrease, the first since 2008 when the city underwent a revaluation. The city’s municipal tax rate has skyrocketed 96 percent since 2010 as the casino town’s tax base dropped two-thirds amid gambling competition in nearby states.
A homeowner living in a house valued at the city average of $141,500 will pay $138 less in municipal taxes in 2017, according to the state Department of Community Affairs, which is overseeing the state takeover.
But city taxpayers could still see an increase in their county tax bill. Atlantic County will receive 10.4 percent of the casino payments in lieu of taxes, according to the state. The county wanted a 13.5 percent piece of the PILOT pie, the difference of $4 million per year or $40 million over a decade.
Atlantic City’s proposed budget is about $56 million less than the one in 2015. The smaller budget and tax decrease were seen as victories for officials involved with the city’s finances.
Former U.S. Sen. Jeffrey Chiesa, who is leading a state takeover of the city, recently implemented unilateral contract changes to the public safety unions that slashed salaries and benefits for police and firefighters. The unions have sued to block the cuts, arguing the takeover law is unconstitutional.
The state also struck a $72 million tax settlement with Borgata Hotel Casino & Spa that saved the city $93 million and essentially put Borgata back on the tax rolls. The casino had withheld property tax payments but is now paying its part of casino payments in lieu of property taxes.
“Real progress is being made in the city, which is great news for the people who live, work and visit Atlantic City,” Chiesa said in a statement.
Gov. Chris Christie praised Chiesa and jabbed at his political opponents in a statement issued before the council meeting.
“It took us merely a few months to lower property taxes for the first time in the past decade, when local leaders shamelessly spent beyond their means to satisfy their special political interests,” Christie said.
City officials, though, described the budget as a collaborative effort with the state.
“He’s the governor. He makes those comments,” said Guardian, who called the takeover unnecessary. “What I think is it’s clear the city moves ahead with the state.”
Council President Marty Small, who chairs the Revenue and Finance Committee, said he was “intimately involved” in the budget process.
“This is a win-win-win for everybody, particularly the taxpayers,” Small said.