ATLANTIC CITY — Residents of this struggling city have been hit with another property-tax rate hike.
The state imposed a nearly 9 percent increase on the tax rate when it adopted the city’s $241 million budget earlier this month. The new rate, $1.898 per $100 of assessed value, is up 15 cents from last year.
The city’s tax rate has increased 96 percent since 2010 as the casino town’s tax base dropped amid gambling competition in nearby states. When counting county, school and library taxes, the city’s total tax rate of $3.86 per $100 of assessed value is up nearly 13 percent from last year and up 113 percent since 2010.
But the city is collecting less tax revenue as its tax base continues its years-long fall from $20 billion in 2010 to about $6 billion today. The tax levy for the 2016 operating budget is $123 million, down from $128 million last year.
And the average residential tax bill is down $14 as assessed values plummet. A resident living in a home assessed at $154,778 will pay $5,974 in property taxes this year. In 2015, the average resident paid $5,988 in taxes on a home assessed at $174,993.
City officials battled the state to keep the tax rate flat, arguing residents had already swallowed a 50 percent tax hike in 2013 through 2014. The city’s proposed 2016 budget and five-year fiscal recovery plan had no municipal tax increase.
But state officials criticized the zero-tax plan given the city’s need to raise revenue to help close a $100 million budget hole. The state recently rejected both the budget and recovery plan. The state Local Finance Board adopted a revised city budget with the tax-rate hike Nov. 9, the same day it took over the city’s finances.
“I fought tooth and nail against this state-imposed tax increase,” Mayor Don Guardian said in a statement. “I told the state over and over again that our residents couldn’t handle any more tax increases because they’ve been taxed to death over the past 10 years. That’s why last year, when we had complete sovereignty over the city, we didn’t have a tax increase.”
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In August, the city proposed a 2016 budget that was $20 million less than last year’s. But it would have raised just $114 million in taxes and relied on $106 million in state aid. The budget drew sharp criticism from Local Government Services Director Tim Cunningham, who wrote an October letter to Guardian about the issue.
“While no elected official desires to increase taxes, it is irresponsible not to maintain the current levy let alone not increase the rate in a way that brings in additional revenue,” Cunningham wrote.
A state board revised and adopted the $241 million budget that reduced state aid by $10 million and increased the tax levy by $9 million.
City Councilman Frank Gilliam has been critical of the city’s budget process and expressed concerns in August about requesting so much state aid without a guarantee the city would get the money. On Tuesday, he called the city’s budget process “hideous” and noted the public budget hearing didn’t include a slideshow presentation.
“I said it was best to have the mayor tell the taxpayers of Atlantic City that we would have to have an increase as opposed to giving people a false sense of hope,” Gilliam said. “I think that was a bad mistake by the administration. It’s our fiduciary responsibility to be upfront, foremost and direct with our constituents.”
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Council President Marty Small said council made multiple efforts to keep the tax rate flat. Not only did the city’s fiscal plan and budget include no tax increases, council shot down a proposal earlier this year to include an estimated tax increase in property-tax bills, Small said.
“The council members who voted on the budget had an intent for a zero tax increase, and we remain focused on that despite noise from the outside,” Small said. “We are in the position we are in. It’s extremely unfortunate.”