Atlantic County will receive 13.5 percent of Atlantic City’s casino payments in lieu of taxes for six years — from 2019 through 2024 — under a lawsuit settlement with the state.
The details were spelled out in a letter Tuesday from County Executive Dennis Levinson to all mayors in the county.
As a result, the county will receive about $37.2 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, the letter states.
Levinson acknowledged last week that a settlement had been reached but declined to provide details until all six municipalities in the lawsuit had approved it.
The county would stay at 10.4 percent of $120 million for the PILOT’s first year of 2017, then go up to 12 percent of this year’s $130 million payment, and back to 12 percent in the final two years of 2025 to 2026. However, the law requires the program to be reviewed in 2025, and it could be discontinued or changed at that time.
The amounts the casinos pay as a group are set each year based on their financial success.
The county also agreed to increase shared-services savings to Atlantic City to $2.1 million from about $1.1 million today, Levinson said Wednesday. The county now runs the city’s Meals on Wheels program, provides portions of its public health services, and runs its nutrition sites and a transportation program for seniors, the disabled and veterans.
The services are provided for a fee, but it is less than the city had been paying to provide them, he said.
“We also offered to do, which they did not accept, trash and recycling … and offered to give them $100 million for the MUA (Municipal Utilities Authority), with a reverter so they could buy it back,” Levinson said. “And we backed a bond to bring Stockton (University) to Atlantic City,” he said of the financing deal that allowed the resort campus to move forward.
Levinson said there are still many services the county could provide for less money than the city now pays.
“We could do the codes, licensing and inspection, the rest of public health — a myriad of things,” Levinson said.
The lawsuit challenged the constitutionality of the PILOT law. The county sued after the Gov. Chris Christie promised the county would receive 13.5 percent, then announced the amount would be 10.4 percent.
“Based on a 10 year projection, if the County’s share remained at 10.4%, the total shortfall over the 10 year life of the Pilot would be approximately $37,200,000,” the letter said. And the state would have had the right to decide the county’s share could be even less.
The PILOT was intended to help stabilize Atlantic City’s tax base after several casino property tax appeals sent it plunging.
Last year the county lost about $5 million in tax revenue from Atlantic City despite receiving about $100,000 more from the casinos than it did in 2016, according to previous Press reports. The county lost revenue because the casinos were taken out of the tax base, resulting in a loss of $3.2 billion in ratables, the county said then.
The tax bill for Atlantic City, including the casinos, was $24.9 million in 2016 before the PILOT. In 2017, that same tax bill for everyone (including the 10.4 percent PILOT) was $19.9 million, according to previous reports.
The municipalities that joined the county’s lawsuit were Absecon, Egg Harbor Township, Hamilton Township, Somers Point, Ventnor and Weymouth Township.