A state-appointed city overseer has settled Atlantic City's remaining casino property tax appeals from 2014-2017. The settlement includes Caesars Atlantic City, Bally’s Atlantic City, Harrah’s Resort, Golden Nugget Atlantic City, as well as several of billionaire Carl Icahn's properties (the closed Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, as well as Tropicana Atlantic City). While the state did not reveal the exact amount of the settlement, officials said an $80 million bond introduced by City Council last month will be used to fund the repayments.
New Jersey Governor Chris Christie on Monday conditionally vetoed two controversial bills aimed at stabilizing Atlantic City’s chaotic finances. In an effort to end property appeal battles, which officials say “significantly strain city finances,” the first bill would have let casinos stop making property tax payments based on real estate values, and instead make fixed payments in lieu of taxes (PILOT) for the next 15 years. The second bill would have diverted gambling money to the city, which the city was counting on to help close a $101 million deficit this year. Christie suggested alterations to both pieces of legislation and sent them back to lawmakers for their approval.
After suffering plummeting property tax revenues for the past several years due to failing casinos, five bills aimed at stabilizing Atlantic City’s chaotic finances will become law Monday if Gov. Chris Christie doesn’t intervene. However, not everyone is on board with one especially controversial plan. The Casino Property Taxation Stabilization Act would let casinos stop making property-tax payments and instead cumulatively make $150 million in payments in lieu of taxes (PILOT) annually for two years, then $120 million for each of the next 13 years. Other bills would dismantle the Atlantic City Alliance and slash funding for the Casino Reinvestment Development Authority; money would be diverted from those agencies and instead go toward paying down Atlantic City’s debt and expenses.
In an effort to cure Atlantic City's reeling gambling industry, which has seen about half its revenue disappear since 2006, a plan was introduced three months ago that would make sweeping changes to the way casinos pay property taxes. Rather than paying property taxes, casinos would cumulatively make $150 million in Payments in Lieu of Taxes (known as "PILOT") annually for two years, then $120 million for each of the next 13 years. But despite bipartisan support from Atlantic County officials, the plan continues to languish in the Legislature.
New Jersey Assemblyman Chris Brown has called for a 5-year property tax freeze in Atlantic City along with an even further drop in casino tax assessments. According to NBC 40, Brown claims that businesses in Atlantic City have already endured a 52% increase in their taxes over the past two years, and that a 5-year tax freeze would allow time for Atlantic City to cut costs and bring stability.
Although Nevada's Question 3, which proposed a two-percent (2%) margin tax on business entities in Nevada with total revenue in excess of $1,000,000 to fund the operation of the public schools, was shot down by voters in the Nov. 4 election, the Las Vegas Metro Chamber of Commerce told members it’s time to step up and help raise more revenue for education. While business leaders rejected Question 3, they do support tax and education reform, as long as it's long-term, stable and doesn't just target one industry.
Assemblyman Vince Mazzeo announced today he will be introducing legislation to create jobs, spark economic development and provide vital property tax relief by creating an Urban Enterprise Zone (UEZ) for Atlantic City. The proposed legislation would add Atlantic City to the UEZ for 10 years, and enable it to charge half the state sales tax and qualify for other economic incentives. Businesses in the zones can charge 3.5 percent sales tax, and qualify for tax credits of $1,500 for each new full-time worker they hire.
A recent ruling from the U.S. Bankruptcy Court will allow Atlantic City, NJ to collect up to $30 million in unpaid property taxes from the former Revel Casino Hotel. According to The Wall Street Journal, Judge Gloria Burns lifted the bankruptcy code's shield on protecting Revel from litigation and creditor collections, with the caveat that the city wont be able to tack on penalties.
Much to Atlantic City residents' dismay, the City Council approved a 29 percent tax increase as part of it's new budget. However, city leaders are trying convince upset locals that their decision was actually in their best interest. According to the Philadelphia Business Journal, Mayor Don Guardian said the tax hike was necessary or else the resort town would have lost out on $20 million in state aid and would have faced a tax hike approaching 50 percent. The new budget still has to be approved by the state of New Jersey.
By Jack Nash, Northeast Area Leader / Principal, Philadelphia
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