Atlantic County Says It Lost Under State Casino Tax Plan

Officials in Atlantic County New Jersey say the county lost about $5 million in taxes under a state-approved payment in lieu of taxes plan for Atlantic City casinos.

A state-imposed payment in lieu of taxes plan for Atlantic City cost its home county about $5 million in taxes, Atlantic County officials say.

The county is challenging in court the tax plan for city casinos that was approved by the state legislature to help shore up Atlantic City’s finances and stop expensive tax appeals by casinos.

The county received about $100,000 more from the casinos in 2017 than it did in 2016, but officials said the program—which removed the casinos from tax rolls—lowered the entire Atlantic City tax bill.

The tax bill for all of Atlantic City, including the casinos, was $24.9 million in 2016 before the PILOT. In 2017 that same tax bill was $19.9 million.

According to the county and reported by the Press of Atlantic City, the loss of ratable value caused by removing the casinos from the tax base lowered the resort’s share of county taxes by more than could be corrected by only receiving a 10.4 percent share of the Pilot funds. While the casinos paid more, the city as a whole paid nearly $5 million less in 2017.

Representatives from the state Division of Consumer Affairs told the Press that the county is playing politics and maintain there was no need for a county tax increase this year.

“The county received more money under the casino PILOT payments this year than it would have received under ad valorem taxes,” Lisa Ryan, a spokeswoman for the DCA told the paper. “So, the county’s argument against the PILOT law is strictly political in nature and has no basis in reality.”

The county maintains that taking casinos out of the tax base under the PILOT legislation resulted in a loss of $3.2 billion in ratables or about 10 percent of the county’s tax base. The loss of that 10 percent affects every other municipality as the county equalizes property values as part of its process of setting one county tax rate for every municipality.

That means taxpayers outside of Atlantic City pay more.

“We received $7 million from non-casino taxpayers in Atlantic City, which is substantially less than in the past,” said Keith Szendrey, assistant to the Atlantic County tax administrator. “By taking the casinos out of the tax base, it decreased the value of Atlantic City. When the value of one town drops, the others have to make up for it.”

The county sued the state of New Jersey in the spring over the PILOT bill, claiming it is unconstitutional under state law. The case is pending a decision in Superior Court.