NORTHFIELD — An unexpected property-tax appeal settlement with the former Trump Taj Mahal Casino Resort and billionaire Carl Icahn is leaving Atlantic County taxpayers again at the mercy of Atlantic City finances.
“We believe, according to what (the state) has told us, that there will be no significant impact on taxes,” said county Executive Dennis Levinson, after talking to a representative of the state Department of Community Affairs. “We are taking them at their word.”
The DCA did not have a comment by press time.
A new settlement is a surprise to everyone, as Gov. Chris Christie announced in August 2017 his administration had “resolved all the remaining property-tax appeals filed by casino properties in Atlantic City.”
County taxpayers could depend on a property-tax decrease for 2019, if the county’s finances were all that mattered, Levinson said.
“In 2019, there will be no tax increase,” Levinson said in his county budget address at the Board of Chosen Freeholders meeting Tuesday. “Based on the information we have from the state, it appears the county general purpose tax will go down 1 cent.”
The budget address was presented to freeholders Tuesday but will not be introduced until the Jan. 29 meeting in two weeks, said county Administrator Jerry DelRosso. Budget figures will be made public then.
Levinson said county finances remain strong, with a stable bond rating of Aa2 from Moody’s Investors Service, and AA stable from Standard and Poor’s, in spite of having the state’s biggest decline in tax base for any county of $27.3 billion over the past 10 years.
“The next highest value loss in the state was approximately $17 billion,” Levinson said.
The county refunded more than $78 million because of successful tax appeals, mostly by casinos, due to overassessments during that time, he said.
“No other county has even come close to what we had to refund,” Levinson said. “For 2018, the county’s refunds of $8.3 million are about twice what the next highest county refunded.”
Now, it appears more refunds may be needed, even though Christie credited his friend, former U.S. Sen. Jeffrey S. Chiesa, with settling all such appeals and setting Atlantic City’s finances to rights in 2017. Chiesa’s law firm, which Christie had appointed to lead the financial recovery effort for Atlantic City, billed the city more than $5 million from 2016 through last July.
Levinson said the county Board of Taxation was unaware of any pending appeal filed in state Tax Court, as were county officials.
The county found out about the pending settlement when a representative called the state Board of Taxation to get the 23 municipal value figures so it could put together its budget and the tax rate for each municipality.
“We asked for the numbers for Atlantic City, and the answer was no,” said Levinson, because the state doesn’t yet know what the effect will be from the appeal. Instead, the state gave the county its best estimate.
The state did not provide details on what year the appeal was from, said Levinson.
As part of a payment in lieu of taxes (PILOT) law, casino properties can no longer appeal their property taxes but began paying fixed amounts starting in 2017.
The county successfully sued the state to get a larger share of the PILOT payments, after being promised 13.5 percent by Christie and then being offered just 10.4 percent.
Last May, the county and state settled the suit, with the county accepting 10.4 percent of the $120 million payment for 2017, 12 percent of 2018’s $130 million payment, 13.5 percent from 2019 to 2024 and 12 percent in the final two years of 2025 and 2026. However, the law requires the program to be reviewed in 2025, and it could be discontinued or changed at that time.
As a result, the county will receive more than $30 million more from the PILOT over 10 years than it would have received if the county share stayed at the state-set 10.4 percent.
Christie said in August 2017 the tax agreements that were supposed to end all such appeals were for Bally’s Atlantic City, Caesars Atlantic City, Golden Nugget Atlantic City and Harrah’s Resort Atlantic City for 2016; for Tropicana Atlantic City for 2015 and 2016; for the former Taj Mahal for 2014 to 2016; and for the former Trump Plaza for 2014 to 2017.
Atlantic City Council covered its costs with an $80 million bond ordinance, but the state never gave details on specific settlements.
“Because of our hard work, the city has now quantified its casino tax appeal debt and has a plan in place to finance this debt that responsibly fits within its budget,” Chiesa said at the time.
“City residents can breathe easier knowing the state put the city in a much better position to preserve public services as it pays down the tax refunds it owes to casinos,” Christie said then.