ATLANTIC CITY — As Atlantic County looks forward to preparing its 2018 budget, officials are also looking back at money they say they’ve lost as part of the casino payment in lieu of taxes program.
Despite receiving about $100,000 more from the casinos in 2017 than it did in 2016, the county maintains it has lost $5 million in tax revenue from Atlantic City.
The tax bill for Atlantic City, including the casinos, was $24.9 million in 2016 before the PILOT. In 2017 that same tax bill was $19.9 million.
According to the county, the loss of ratable value caused by removing the casinos from the tax base lowered the resort’s share of county taxes by far more than could be corrected by only receiving a 10.4 percent share of the funds. While the casinos paid more, the city as a whole paid nearly $5 million less in 2017.
Representatives from the state Division of Consumer Affairs say the county is playing politics and maintain there was no need for a county tax increase this year.
In previous reports, the DCA said the county was putting out misleading statements and county officials are just “throwing arguments against the wall” to see what sticks.
“The county received more money under the casino PILOT payments this year than it would have received under ad valorem taxes,”Lisa Ryan, a spokeswoman for the DCA, said on Thursday. “So the county’s argument against the PILOT law is strictly political in nature and has no basis in reality.”
The reduced payment stems from the casinos being removed from the tax base and instead paying a set amount based on revenue levels.
Taking casinos out of the tax base under the PILOT legislation resulted in a loss of $3.2 billion in ratables.
That adds up to about 10 percent of the county’s tax base. The loss of that 10 percent affects every other municipality when the county sets about equalizing property values as part of its process of setting one county tax rate for every municipality.
County officials, however, say that county taxpayers outside of Atlantic City are paying more as a result from the PILOT.
“We received $7 million from noncasino taxpayers in Atlantic City, which is substantially less than in the past,” said Keith Szendrey, assistant to the Atlantic County tax administrator. “By taking the casinos out of the tax base, it decreased the value of Atlantic City. When the value of one town drops, the others have to make up for it.”
The county sued the state of New Jersey in the spring over the PILOT bill, claiming it is unconstitutional under state law. During a court hearing last month, attorneys for Atlantic County and a citizens group asked a Superior Court judge to strike down the state law that changed casino tax payments to a flat rate.
In 2017, the average homeowner in Atlantic City saw his or her county tax bill drop by $418. Every other town in Atlantic County, excluding Port Republic, had an increase in the county tax bill ranging from $50 to $574, according to previous press reports.
Port Republic was spared a county tax increase because it also fell in value unrelated to the PILOT payments.
The fight over the payments was a central campaign issue for candidates in the 2nd Legislative District this fall. County officials and local Republicans have said the county should receive 13.5 percent of the casino’s PILOT payments to make up for the loss of tax revenue. Instead, it has received 10.4 percent, a difference that translates to receiving about $4 million less a year.
Assemblyman Chris Brown, a Republican, has introduced a bill that would guarantee the county receives a 13.5 percent share. He said he hopes to pass it in the lame-duck session before Gov. Chris Christie leaves office.
Democratic Assemblyman Vince Mazzeo and outgoing Sen. Colin Bell said they would rather wait until Phil Murphy becomes governor and Frank Gilliam becomes mayor of Atlantic City before making any decisions related to the PILOT issue.
“In just a few days New Jersey will have a new Governor and Atlantic City will have a new mayor. This isn’t a new issue. We won’t try to push through a decadelong mandate at the last minute without their input,” the two Democrats said in a joint statement. “We look forward to meeting with Governor-elect Murphy and Mayor-elect Gilliam to work in a cooperative and responsible way that benefits both the residents and businesses of the City of Atlantic City and Atlantic County.”
Brown, however, said the bill should be passed in lame duck session because Bell and Mazzeo said during a debate on Oct. 11 they would support legislation that guaranteed the county would get its desired percentage.
The Atlantic County Board of Chosen Freeholders approved a resolution Tuesday that will add …
“If Gov. Christie and the Democrat-controlled Legislature can see fit to rush through nominations and legislation like ‘Adopt a Monarch Butterfly Way station’ during lame duck, then they can certainly move a bill vital to Atlantic County’s hardworking families to provide $40 million in property tax relief,” Brown said.
Even if the bill passed the state Legislature, it’s unlikely Christie would sign it into law.
Last year, Christie and Atlantic County Executive Dennis Levinson had a handshake deal that the county would receive its desired 13.5 percent. But the governor reneged on the deal because, he said, the county was not “stepping up to the plate” in helping Atlantic City by taking over services the city contracted out to try to cut expenses.
The county offered to collect trash, provide meals on wheels and buy the city’s Municipal Utilities Authority to try to help, but Christie reiterated that wasn’t enough.
County officials have speculated they did not get their share because they declined to create a countywide police force that would eliminate the police department in Atlantic City, a key component to the governor’s former revitalization plans in Camden.
If the county had received its promised 13.5 percent share, most county taxpayers outside of Atlantic City would have avoided a tax increase this year, County Administrator Jerry DelRosso said.
“The numbers provide the true impact of the PILOT on Atlantic County’s taxpayers,” DelRosso said. “The casinos received preferential treatment at the expense of the county’s noncasino taxpayers who do not have the benefit of a fixed tax rate and must make up the loss in revenue resulting from the PILOT.”