Five bills that some lawmakers say will stabilize Atlantic City’s chaotic finances will become law Monday if Gov. Chris Christie doesn’t intervene.
Among them is a controversial plan to allow casinos to make fixed annual payments instead of highly variable property-tax payments.
Proponents say that bill will fix an Atlantic City property-tax system beset by instability.
Critics, including one of Atlantic County’s top officials, say it’s a ruinous proposal.
The bill, said county Executive Dennis Levinson, is “one of the worst pieces of legislation that anyone has ever seen.”
The Casino Property Taxation Stabilization Act — colloquially, the PILOT — would let casinos stop making property-tax payments and instead cumulatively make $150 million in payments in lieu of taxes annually for two years, then $120 million for each of the next 13 years.
The bill passed the Legislature on June 25 along with bills to dismantle the Atlantic City Alliance — the city’s nonprofit marketing arm — and slash funding for the Casino Reinvestment Development Authority, which uses casino-paid taxes to finance large local events and development projects. Under the bills, money would be diverted from those agencies and instead go toward paying down Atlantic City’s debt and expenses.
Christie has been silent on the proposals, which were introduced in December. Monday is his deadline to sign them into law, veto them or call for amendments. If he does nothing, they become law.
In Atlantic City, it has become a matter of course for casinos to file court appeals over the assessed values assigned to their properties by the city.
Assessments nixed by judges have put the city on the hook for huge property-tax refunds. Borgata Hotel Casino & Spa, for example, is owed $148 million in property-tax refunds for 2009 through 2013 after convincing a state-court judge to slash its assessed value by more than $1.3 billion.
If the PILOT becomes law, “there will be no more tax appeals from the casinos,” said Assemblyman Vince Mazzeo, D-Atlantic, who sponsored the bills with state Sen. Jim Whelan, D-Atlantic. The appeals and the resulting refunds, he said, have caused “a tremendous burden to Atlantic City and Atlantic County taxpayers.”
The Casino Association of New Jersey, a lobby for Atlantic City casinos, is pining for the PILOT and has suggested in a stream of press releases that more casinos will close if the bill isn’t passed. Repeated requests to interview representatives of the association were denied.
On Thursday, Joe Kelly, president of the Greater Atlantic City Chamber, which represents local businesses, threw his support behind the PILOT.
“Any business is going to tell you that a stable, predictable environment is what they need to do business,” he said. “If you don’t take your core business of the marketplace and stabilize it, that makes it unstable for the other businesses.”
But Levinson on Thursday called the PILOT “a sweetheart deal for the casinos for 15 years.”
Under the PILOT, “any increase in Atlantic City (spending) will be passed on to the non-casino taxpayer,” he said.
Assemblyman Chris Brown, R-Atlantic, who voted for the PILOT, said the city has made progress in reducing its budget, but its outstanding liabilities are still too large to convince him it won’t need to increase taxes in coming years. He wants the bill redrafted to shorten the duration of the PILOT program and amend the formulas that determine the payment amounts.
“I don’t believe it is fair to stabilize the casinos’ tax obligations off the backs of working families,” he said. “We have to find a way to stabilize property taxes for everyone in Atlantic County.”