Atlantic County’s economic outlook got a ratings boost from Standard and Poor’s Global Ratings this month.
According to a recent report, S&P raised the county’s economic outlook from “negative” to “stable,” citing strong county management, budgetary flexibility, and stability brought by the payments in lieu of taxes that casinos pay to Atlantic City.
S&P also reaffirmed the county’s AA bond rating.
“Despite the challenges Atlantic City’s financial pressures presented, the county maintained stable operations, posting small surpluses in both fiscal 2015 and 2016,” the report read. “With the PILOT legislation, a lot of uncertainty regarding the impact of Atlantic City tax appeals is gone, although some remains given that the Division of Community Affairs’ Local Finance Board will set the county’s share of the revenues annually.”
Crediting the PILOT as a reason for the upgrade is ironic because county officials have raged against the legislation since the state decided to give it a 10.4 percent share of the PILOT money instead of the 13.5 percent share it was originally promised.
The county also has faulted the legislation for the recently announced tax hikes across 21 municipalities, saying that refunds from previous appeals and taking the casinos out of the ratable base have hurt the budget process.
Still, the report credited the formation of the Atlantic County Economic Alliance as a positive sign the county is moving away from a gaming-centered economy. Other positive signs are the Stockton Gateway project in Atlantic City and the groundbreaking of the Stockton Aviation Research and Technology Park, the report said.
The county’s rating could further improve if it continues to increase and maintain its reserves while moving the local economy away from its over-dependence on the leisure and hospitality industry, according to S&P.
“It is extremely rewarding and encouraging to not only maintain our AA rating but to improve our outlook,” County Executive Dennis Levinson said in a statement. “Despite the removal of $3.4 billion from our tax base because of the PILOT and the trials and tribulations surrounding the state takeover of Atlantic City, county residents can be assured of Atlantic County’s stability. Atlantic County stands as a model of effective and efficient government.”