As successful tax appeals have drastically shrunk Atlantic City’s tax base over the last few years, the burden of paying for Atlantic County government’s $156 million tax levy has fallen increasingly on the other 22 municipalities.
Last year, Hammonton sent about $1 million more to the county than it had the previous year, said Mayor Steve DiDonato. The town’s share of the county’s tax levy went from about $5 million to $6 million, he said.
And that was on top of a $900,000 increase from the year before, he said.
Hammonton’s 2013 budget was about $11 million, with $7.6 million raised from taxes. So the town raised almost as much to send to the county as to run local government.
Since 2009, the town has gone from paying 2.8 percent of the county tax levy, to 3.3 percent, while Atlantic City has decreased its share from about 35 percent to 28 percent.
“Unfortunately because Atlantic City property values are declining, it has put a major impact on the rest of the county,” DiDonato said. “I feel we have to hold our line as tight as we can locally, to keep it from affecting our residents as much.”
Seven towns raised more in county taxes in 2013 than in municipal taxes. They were Buena Vista Township, Corbin City, Estell Manor, Folsom, Longport, Port Republic and Weymouth Township.
Last year the towns not only had to absorb the lowered valuation of Atlantic City, but as a result of court decisions also had to repay $16.7 million to Atlantic City in county tax overpayments for the years 2007 to 2012.
How the county tax bill will be split this year depends on municipal valuations and tax appeal refunds, said Keith Szendrey, assistant to the county tax administrator. And the data isn’t in yet, he said.
The Trump Plaza and Taj Mahal casino properties recently obtained an injunction, preventing Atlantic County from certifying its Atlantic City tax list, Szendrey said.
“They say their (new) values are wrong,” Szendrey said. “They have tax appeals pending for prior years.”
Trump Entertainment spokesman Brian Cahill declined to comment.
Szendrey said the Attorney General’s Office is handling the case on the county’s behalf.
“The attorney general’s argument is that you can’t hold up the whole process because somebody is unhappy with their assessment,” Szendrey said. He said a similar complaint was filed by the same parties a couple of years ago to prevent Atlantic City’s list from being certified, but was thrown out in court.
Oral arguments in the case have been postponed twice, once due to Monday’s snowstorm, and are now set for today at 10:30 a.m. in front of Assignment Judge Julio L. Mendez in the Atlantic County Courthouse in Atlantic City.
The Taj Mahal’s assessment already fell 38 percent, from $1.6 billion to $987 million, from 2012 to 2013; and Trump Plaza’s fell 66 percent in the same period, from $557 million to $192 million.
All of the other towns in Atlantic County, including many that conducted revaluations this year, have filed their books on time and the numbers are ready to go, Szendrey said.
If the Atlantic City question is settled soon, Szendrey said he still hopes to have the new equalization table finished by about March 10.
Atlantic City Mayor Don Guardian has said that a 2014 property revaluation will help bring fairness to city property tax bills, which went up about 22 percent last year. But he said in a previous interview the city needs to find a fair and equitable means for casino properties to be measured on how they pay their tax.
“There seems to be only three ways: You can base it on income only. You can base it on cost — what’s the actual cost of building the property with the land? — or a combination of the two,” Guardian said.
DiDonato said the county could do more to cut its expenditures but feels he has been a lone voice in the county calling for bigger county budget cuts. He speculated his status as an independent Hammonton First party member gives him more latitude to be critical of the county than a Republican mayor would feel.
But County Executive Dennis Levinson said the county has stayed under its state-mandated cap for the past 14 years and has eliminated or frozen 122 positions since 2008. He said it also reduced other expenses and mandated employee furloughs.
The county on Tuesday adopted its 2014 budget of just more than $196.6 million, which is an increase of 1.4 percent from 2013. The amount to be raised by taxes, about $156.5 million, is up just more than one-half of 1 percent.
Levinson said he believes the answer is for towns to share services more to save money.
He is proposing the county begin handling tax assessments for its towns, with the municipalities continuing to do tax collection. Such a move would ensure that all towns are assessed accurately and no one is being undercharged or overcharged. It should cut down drastically on tax appeals, he said.
He also believes the casinos should be taxed differently than other properties.
“We have talked about it, now is time for action. We are bleeding from the arteries,” Levinson said. “It was sustainable at one time, when we were making money head over heels.”
Now it’s time to get realistic, he said.
“It’s the goose that laid the golden egg, and we’re going to kill it. Competition is very strong,” Levinson said about Atlantic City. “We don’t have to reinvent the wheel — it’s being done in other states and jurisdictions. We have to start realizing if we are going to compete ... we have to be tax friendly.”
In Egg Harbor City, Democratic Mayor Lisa Jiampetti said the city budget — which was $5.7 million in 2013 — has been cut to the bone since the recession began.
The city’s CFO, Jodi Kahn, said the amount the city sent to the county increased 20 percent last year, from about $960,000 to $1.2 million.
A penny on the city’s tax rate only raises $22,000, Jiampetti said. So raising any significant amount of money causes drastic increases in the rate.
“Atlantic City obviously hurts everyone,” said Jiampetti, “but since we’re such a small town, it’s harder for us when things get spread around. We don’t have the wiggle room other cities have.”
In 2013, the city had the highest effective tax rate in the county at $3.644 per $100 valuation, according to the state Division of Taxation. The effective tax rate includes municipal purpose taxes, school and county taxes and is a statistical study that allows the comparison of one municipality to another, taking into account differences in accuracy of assessed values.
Its general tax rate, which is used to determine tax bills and includes municipal purpose, school and county taxes, is the second highest in the county at $4.128 per $100 valuation.
“We have cut our budget so much. ... We can’t cut anything else to keep taxes down,” Jiampetti said. “We have eliminated positions, have no administrator or public safety director. We’re down in our police department.”
What’s frustrating to her, she said, is residents blame the local government for the increases in their overall tax bill.
“They look at the total rate and think it’s our fault,” she said.
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