A new tax on Atlantic City Hotel rooms has advanced in the New Jersey Assembly with hopes of preserving police and firefighter jobs in the resort.
The bill would place an additional $2 tax on hotel rooms for two years. The Assembly’s Appropriations Committee approved the bill, which now moves to the full Assembly.
The bill is sponsored by Assembly Speaker Vincent Prieto, who opposed much of the state’s takeover of Atlantic City finances, including moves to cut union jobs.
“This would be temporary solution to ensuring public safety for the next two years, which is hopefully enough time for the city’s finances to be righted and smart decisions to be made about the city’s future,” Prieto said in a press statement after the vote.
The committee hearing brought testimony from officials that shed light on layoffs that the state may impose on the city. State officials have not commented on labor negotiations.
The state AFL-CIO’s Legislative Affairs Coordinator Eric Richard that said the bill would stop “dangerous staffing reductions,” according to the Press of Atlantic City. He said the state is seeking $14 million in reductions from the city’s public safety unions by Feb. 1. The $2 fee, he said, would raise $8 million annually.
“The last thing we need for a struggling city like Atlantic City is to have a perception this city is now unsafe due to public safety layoffs,” he said.
Bill DiLorenzo, president of the city’s firefighters union, testified that the city’s fire department could see the layoff of 106 firefighters.
“They’re building a university in the city, they’re building a South Jersey Gas office, and with that they’re going to cut the manpower by 54 percent,” DiLorenzo said according to the Press. “That will be less firemen that we had in 1854 when the fire department started.”
The city’s main firefighter’s union has filed a suit to block the layoffs. The state has given several dates for announcing any proposed layoffs for the fire department, but now says it will wait until federal grants funding the department’s personnel expire in September. Other changes to the union’s collective bargaining agreement, including changes to overtime, work schedules and pay, are to be imposed Feb. 19, according to Philly.com.
Meanwhile, hospitality officials oppose the tax saying city hotel rooms already carry a number of state and local taxes.
In another matter, the Assembly’s Tourism and Gaming Committee advanced a bill to regulate daily fantasy sports in the state.
The updated bill would impose a quarterly tax fee of 10.5 percent of the gross revenue of DFS operators. The bill applies to DFS companies such as DraftKings and FanDuel—which are currently negotiating a merger—and not traditional fantasy sports contests played among small groups.
DFS operators would need permits from the state Division of Consumer Affairs, as would casinos and racetracks that partner with the companies.
“The fantasy sports industry is a growing market year after year,” said Assemblyman Vincent, a co-sponsor of the bill in a press statement. “The time is right for New Jersey to enter the fold with regulations aimed at providing strong consumer protections for our residents.”
The bill differs from a state Senate version. That bill taxes DFS companies at 9.25 percent n companies’ gross revenue. The two houses would have to reach a compromise before sending the bill to Governor Chris Christie.
State Sen. Jim Whelan (D-Atlantic), the main sponsor of the Senate’s version, agreed.
“At this point, we’ll probably get on board with their legislation,” state Senator Jim Whelan—thee sponsor of the Senate bill—told NJ Advance Media. “I don’t know if we’ll get to a bill where everyone is satisfied, but we do agree there needs to be oversight.”
The start of 2017 has seen a flurry of legislation introduced in about 11 state legislatures to regulate DFS sites.
New Jersey’s move comes after the Assembly passed a non-binding resolution urging President Donald Trump and his administration to oppose efforts in Congress to ban online gaming. New Jersey online gambling sites brought in about $200 million in revenue in 2016, which resulted in about $30 million in taxes for the state.
The resolution states that a federal ban on online gambling would deprive the state and its casino industry of much-needed revenue and jobs as well as erase substantial investments in creating the market.
In another Atlantic City development, the state Casino Reinvestment Development Authority approved a $7 million grant to Meet AC, the resort’s convention and visitors bureau, for 2017. The group had asked for $8 million, but said the reduction should not seriously affect the group’s work.
“In this difficult economic environment, we are gratified that the CRDA has continued to fund Meet AC,” Jim Wood, CEO of Meet AC told the Press of Atlantic City. “We all are having to do more with less. Marketing Atlantic City and Atlantic County is critical to its existence, growth and the livelihood of its residents who depend on us to deliver.”
