I am an Atlantic City resident whose taxes have almost tripled in 10 years.
During that time, Atlantic City underwent a revaluation in the midst of a frenetic and illusionary boom in real estate values. When the bubble burst, the city faced tax appeals from its casino hotels, and we ended up with an inequitable situation where residential property owners carry an unfair proportion of the tax burden. Many residents pay taxes that exceed their mortgage payments.
Real estate taxation in New Jersey is based upon assessments of "fair market value," but this system treats residential and commercial property differently. Residential homes are valued based on comparable sales, while commercial properties are valued based on the income-capitalization method. But Atlantic City is unique because of the many billions of dollars spent to build casino hotels that annually draw and service a number of people that dwarfs the city's population.
There is no other comparable municipal experience in New Jersey. Atlantic City needs a new paradigm for assessing real estate values and taxes, and it needs local and state legislators, both Republican and Democrat, to get a piece of special legislation passed.
The new formula would have to allocate to residential properties, commercial properties and casino hotels a percentage of the overall budget that can be attributed to the services they use and the costs to the city that result.
Other New Jersey residents pay taxes to support their school systems and local services, but Atlantic City is an anomaly. Its residents carry the burden of providing services for 30 million people per year. The casino hotels employ nearly as many people as Atlantic City has residents, and most of those employees go home to their bedroom communities and arguably pay far lower taxes there.
The present system is not structured to account for these inequities. Atlantic City is sorely in need of a real estate tax exception.