New Jersey’s public referendum allowing for new casino construction outside of Atlantic City scheduled to go before voters in November is short on the details of the plan – including even naming exactly where they will be built.
But a New Jersey Assemblyman and vocal proponent of the new construction has offered a resolution to answer at least some of the questions on the proposed construction. Democratic Assemblyman Ralph Caputo said his resolution will detail how state tax revenue from the casinos will be spent.
Caputo also discussed possible tax rates for the casinos depending on where they will be built. He told the Associated Press that a new casino at the Meadowlands Racetrack would likely be taxed at 35 to 40 percent and a possible casino in Jersey City would be taxed at 15 to 20 percent of revenues.
Though sites for the casinos have not been named, The Meadowlands and Jersey City are sites of two of the biggest proposals for construction in the state and are considered the frontrunners should voters approve the referendum.
Meadowlands track operator Jeff Gural and Hard Rock International have proposed building a casino at the East Rutherford sports complex. A second casino proposal in Jersey City could cost $4 billion to $5 billion.
Caputo’s resolution designates state revenue from the casinos for funding aid to senior citizens programs, public space and transportation improvements and support for Atlantic City’s redevelopment as a full tourist destination.
“Transparency and clarity is critical for residents and all parties involved in the North Jersey casino debate, especially, as we move closer to November elections,” said Caputo in a press statement. “We have seen and heard many different opinions on this issue, both negative and positive. However, it is important that the legislature’s intent for any funding coming out of a casino built in the north is spelled out clearly and as definitively as possible.
“Voters should be clear as to what they will be casting their vote on in November,” he said. “They should know where we stand. With this resolution, our intent for the state portion of the funding from casinos in the northern part of the state will now be in writing and have an opportunity to be agreed upon by both houses.”
The resolution still does not set a tax rate for the new casinos. Legislators in the state have said they would continue to work on setting the details of the plan as the referendum approached, but there has been little movement in Trenton.
State Senator Paul Sarlo, who has worked closely with fellow Democratic Senate President Steve Sweeney on the casino expansion plan, told the AP he doesn’t expect those decisions to be made before the referendum and expects difficulty in forging an agreement on casino taxes.
“Plus, I don’t think people are paying that much attention to this,” he said. “I don’t know that giving them additional details is going to get them more engaged.”
Caputo’s proposed resolution, however, does include a statement of intent of the legislature to establish a tax rate considerably higher than the tax rate currently applied to Atlantic City casinos and to be tiered according to the amount of the investment made for each casino development.
Additionally, the measure will include various guidelines for choosing a location, selecting licensed operators, and the administration of programs to be funded from state revenues, according to PolitickerNJ.
The resolution does include promised aid to Atlantic City, including funding programs for job placement for displaced workers form previously closed casino properties in Atlantic City; promotional support for Atlantic City as a destination resort; and grants and loans to promote non-gaming development, attractions, and destination programming.
The resolution also would set aside funding for programs designed to aid and encourage the thoroughbred and standard bred industries in the state.
These moves in the legislature come as both those in favor of the construction and against the measure have been waging expensive advertising campaigns to persuade voters. Opponents of the plan have pointed to the lack of detail in the referendum.
“It’s so vague that we have no idea who is going to build these casinos, where they will be built or how much they will pay in taxes,” Bill Cortese Jr., a spokesman for the opposition group Trenton’s Bad Bet—which has been funding a TV campaign against the referendum—told the AP.
The group also took issue with Caputo’s resolution.
“How can Assemblyman Caputo deliver a detailed plan for revenue distribution on nonexistent tax rates and when no real economic examination has ever taken place?” Cortese said in a separate interview. “The numbers politicians are throwing around appear to be pulled completely out of thin air.”
The group is funded in part by Genting Group, which owns the Resorts World casino at the Aqueduct Racetrack in New York. Several opposition groups have received funding form out-of-state casinos who would be impacted by new competition.
A pro-expansion group, Our Turn NJ, has stressed that senior citizen programs could see $200 million in new funding each year in their pro-casino campaign. The group is backed by Reebok footwear magnate Paul Fireman, who’s proposing the Jersey City casino, and Gural, who has offered to pay the 55 percent tax rate at which Pennsylvania slot machines are taxed, according to the AP.
Fireman was quoted in an interview with the Jersey Journal saying his proposal would be a “windfall” for Jersey City and the state. The project is expected to create around 9,000 part time construction jobs and 6,000 full time jobs once the resort is fully operational he said. The resort is expected to generate around $65 million in taxes during its first year of operation and around $3.9 billion during the next 30 years.
However, opponents of the plan argue that the Northeast casino industry is already saturated and that new casinos would simply cannibalize casino business that now goes to Atlantic City.
