Atlantic City

ATLANTIC CITY — The seaside resort made famous for catering to people’s vices has been relatively silent on the issue of recreational cannabis.

But with New Jersey seemingly on the precipice of legalization, Atlantic City wants to make sure that if marijuana sales, distribution or cultivation are to be permitted, the city gets its fair share of tax revenue.

The bill making its way through the state Legislature for legalizing adult use of recreational cannabis carves out a provision for municipalities that actively participate. If the deal becomes law, municipalities with cannabis retailers would collect 3 percent tax, those with cultivators would collect 2 percent and those with wholesalers would get 1 percent.

City Council will entertain a resolution during Wednesday’s meeting that states that tax revenue generated in Atlantic City from legalized marijuana be “returned directly” to the resort or sent to the state agency that oversees the city’s finances for the sole purpose of property-tax relief.

Council President Marty Small Sr. said the intent of the resolution is to ensure the state does not ignore the needs of the city when it comes to revenue generated from within the resort’s borders. Small pointed to luxury, room and parking fees that all go directly to the state — to the tune of $90 million annually — as evidence for why he believes a formal resolution is necessary.

“For far too long, we’ve been overlooked in getting our fair share,” he said.

More recently, Small noted that Atlantic City was short-changed on sports betting tax revenue, which was legalized in June. Gov. Phil Murphy signed off on an additional 1.25 percent sports betting tax in October that goes to the Casino Reinvestment Development Authority to market and promote Atlantic City.

Meanwhile, the host municipalities of the two racetracks where sports betting is permitted were directly awarded that additional tax revenue.

“When it comes to Atlantic City,” Small said, “(revenue) always seems to be like a GPS — it’s rerouted, every time.”

The state Department of Community Affairs, which has oversight of Atlantic City following the 2016 state takeover, did not respond to a request for comment on the proposed resolution.

Mayor Frank Gilliam Jr. has publicly endorsed the idea of capitalizing on recreational marijuana if the state approves legalization. The Mayor’s Office did not respond to a request for comment Tuesday.

Councilman Jeffree Fauntleroy II said he wants the resolution to be tabled Wednesday so the city’s governing body can discuss the pros and cons before moving forward with what amounts to an ultimatum.

Fauntleroy said his understanding of the proposed bill at the state level allows for municipalities to impose an additional tax on top of the $42 per ounce outlined in the legislation. He wants to see Atlantic City take advantage of that opportunity.

“That could potentially be (millions) of dollars, depending on what the actual sales are going to be in Atlantic City,” he said. “I don’t think we should be cutting off our nose to spite our face.”

Small said that while he is “personally and morally” opposed to legalizing marijuana, he recognizes the city’s need for additional revenue streams and does not want to sacrifice the potential financial boon cannabis could bring to the resort. But only if the price is right.

“We have to put our foot down, we have to take a stand and simply say that we may have no problem allowing marijuana for recreational use, but the taxpayers are going to get that 3 percent whether it’s directly to the city or DCA,” he said. “If we can’t get that, they can go blow somewhere else.”

Contact: 609-272-7222 Twitter @ACPressDanzis

Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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