Atlantic County may have to double the amount it refunds to Atlantic City this year for successful tax appeals, from about $6.3 million to $13.1 million, officials said Tuesday.
It could mean adding about another 2 cents to the county tax rate, with the average homeowner paying about $48 more than expected this year, said Atlantic County Administrator Jerry DelRosso.
That additional payment would be just to reimburse Borgata Hotel, Casino & Spa for its successful appeal of property taxes for 2009 and 2010.
But that depends on whether the county must refund millions to Atlantic City that the resort has not yet paid to Borgata, said Keith Szendrey, assistant to the county Tax Administrator Marge Schott.
“If you view it as a reimbursement then there is nothing to reimburse if no payment has been made,” said Szendrey.
Under normal circumstances, the city would have already made the full refund covering municipal, school and county taxes to Borgata, Szendrey said.
Then the county would refund its portion of the Borgata overpayment — about $6.8 million — to the city this year.
But because the near-insolvent city has not paid Borgata, the county is asking the state Attorney General’s Office for its legal opinion about when the county must refund the city.
Atlantic City Tax Assessor Novellette Robinson called the county tax office late Monday to say the city expected the Borgata refund this year, said Szendrey.
It was a surprise to the county.
Robinson had never sent the county notice the case was closed, so the county had not planned for that substantial refund this year, said Szendrey.
“They are the gift that just keeps on giving,” said County Executive Dennis Levinson of Atlantic City. “This is kind of a shock to us. We are hoping we don’t have to add it this year, but we will have to add it (at some point).”
Borgata won its 2009-10 property tax appeal in state tax court in 2013, and the city took the case to Appellate Court, where it lost in July 2015.
The court decided the city owed Borgata about $62 million in refunds and interest for those two years. The county’s share of that amount was about $6.8 million, Szendrey said.
The city tried to appeal that decision to state Supreme Court, which declined to hear the case last fall.
Chris Filiciello, chief of staff to Mayor Don Guardian, said the city also sent the county a copy of the Supreme Court order denying the city’s appeal on Monday, after being told the county was unaware the appeal was finished.
Filiciello said City Solicitor Anthony Swan told him the city is statutorily entitled to a credit from the county when a taxpayer successfully appeals their assessment, regardless of whether the city has paid the refund or not.
He also said there is no requirement that the city notify the county of the end of a tax appeal.
Szendrey said the county was aware the city was pursuing appeals, and had only read in newspapers that the state Supreme Court had declined to hear the city’s latest appeal.
“We don’t issue refunds based on things we read in the newspaper,” he said, adding it was the municipality’s responsibility to notify the county.
Atlantic County freeholders adopted a $201 million budget with a slight tax decrease in late March but acknowledged at the time that successful tax appeals or Atlantic City’s fiscal crisis could change the final numbers.
If the Borgata payment must be made this year, the owner of a home assessed at the county average of about $240,000 would then pay a general-purpose county tax of about $1,111.20 rather than the expected $1,063.
In addition to the $62 million for 2009 and 2010, the city also owes Borgata about $88 million in settlements for 2011 through 2014, but has not paid those either. As a result, Borgata has moved to have its new tax assessment applied to the 2010 and 2011 tax bills.
Borgata, the city’s largest taxpayer and employer, withheld its $7.5 million first-quarter tax payment due in February and it has said it will continue withholding quarterly payments to offset the $62 million.