New Jersey’s payment in lieu of taxes plan for Atlantic City casinos is being challenged by a citizens group in court, as well as by the legislative board of Atlantic County.
The two challenges are not combined.
First, the citizen’s advocacy group Liberty and Prosperity has sued the state to block the law, according to the Press of Atlantic City. The suit alleges that while the state’s constitution does allow tax exemptions statewide, it does not allow “special tax breaks for just seven casino properties at the expense of all other county taxpayers.”
The state’s PILOT law allows the casinos to collectively pay $120 million annually in taxes. Under the bill, the casinos have agreed not to further appeal their tax assessments.
A series of successful tax appeals—which often required repayment of taxes—by city casinos has wreaked havoc on the city’s municipal budget and plunged the city more than $500 million into debt.
Hearings on the suit are scheduled to begin in July.
Meanwhile, the Atlantic County Board of Freeholders—the legislative body of Atlantic County—has also voted to challenge the PILOT law. The county feels it has been shortchanged in its share of casino taxes under the bill, requiring a general tax increase for all county taxpayers. The county expected to receive 13.5 percent of the PILOT money, but only received 10.4 percent for this fiscal year.
The board voted to spend up to $500,000 to challenge the law, but has yet to file its own lawsuit.
