ATLANTIC CITY — Superior Court Judge Julio Mendez will hear arguments in July over whether a state law that lets casinos make fixed payments in lieu of property taxes is constitutional.
Liberty and Prosperity, a constitutional advocacy group, has sued the state to block the law, which lets the city’s casinos collectively pay $120 million annually in exchange for no longer appealing their assessments.
Liberty and Prosperity claims the state constitution only permits tax exemptions through general statewide laws, not “special tax breaks for just seven casino properties at the expense of all other county taxpayers.”
A state spokeswoman could not immediately be reached for comment.
Oral arguments will take place July 17 in Atlantic County Superior Court, the group said in a news release. Legal arguments must be submitted by July 6.
Seth Grossman, the group’s executive director and attorney, said the state constitution does allow certain tax breaks to encourage development. But he said the casino PILOT law “expands those exceptions to the point of absurdity.”
“In the past, tax abatements were given to a handful of blighted properties to encourage redevelopment,” Grossman said. “Today, these tax breaks are given to the richest corporations and most luxurious properties in the city.”
He added the PILOT law would allow casinos to avoid any future tax increases in the financially troubled city for a decade, putting the burden of any tax increases on homeowners and small businesses.
“Because this applies to county taxes, every business and homeowner in the whole county is also affected,” said Grossman, who urged taxpayer groups and local officials to file supporting briefs with the court.
The casino PILOT law was enacted to end costly casino tax appeals that helped put the city hundreds of millions of dollars in debt.