The New Jersey State senate has passed a package of bills designed to help struggling Atlantic City and stabilize casino tax assessments in the resort.
The measures would let Atlantic City’s eight casinos make payments in lieu of taxes for 15 years. The set payments would hopefully stop the steady drumbeat of casinos appealing their tax assessments and allow the gambling halls to know exactly what they will owe. The city, in turn, would also see its casino tax collections stabilize after losing millions through successful appeals in recent years.
The bills also create new state education aid just for Atlantic City—an exact figure has not been set—mandate health insurance and retirement benefits for casino workers, divert alternative investment taxes the casinos pay for redevelopment to help pay down Atlantic City’s debt and eliminate the casino-funded Atlantic City Alliance. The alliance was a marketing arm for the city, but its $30 million budget would now be allocated to also help the city, though again nothing specific is outlined.
“This plan will help address the immediate fiscal crisis triggered by the multiple casino closings and downturn in the gaming industry,” said State Senate President Steve Sweeney. “It will help stop the hemorrhaging and bring stability to Atlantic City’s finances and more predictability to the city’s revenues. We need to take immediate action to stabilize the existing workforce, the casinos, property taxpayers and the entire community.”
The bills set a payment-in-lieu-of-taxes for casinos that collectively pay $150 million for the first two years and $120 million annually for 13 years, assuming gambling revenue stays within certain ranges in the city.
According to the Associated Press, calculations made in December, which the casinos say are still in effect, would grant large tax reductions to billionaire Carl Icahn and Caesars Entertainment.
Two of Caesars’ three Atlantic City casinos are in bankruptcy. The Tropicana, which Icahn owns, and the Trump Taj Mahal, which he is soon to acquire, would pay nearly $19 million less in the first year of the plan. Caesars and Harrah’s would see a nearly $20 million reduction. Bally’s, which also is owned by Caesars Entertainment, would see a $2.6 million increase in payments. The Borgata would see a $2.7 million reduction.
The bills were amended to allow any casino asked to pay more under the plan than they would have normally been taxed to get an equivalent credit on redevelopment taxes they pay to the state. Without the credit, casinos including Resorts and the Golden Nugget would have faced steep increases.
Under the bills, the casinos forego the right to appeal their tax payments.
The bills now go to Governor Chris Christie for his signature. Christie has not said whether he supports the bills.
