In a bid to protect Atlantic City from bankruptcy, legislators to introduce PILOT bill, come 2015.
After experiencing its worse year in its 36-year history of casino gambling in Atlantic City, state officials are considering numerous tax and financial aid packages to heal the broken city. Steve Sweeney, president of the New Jersey Senate, is proposing a payment-in-lieu-of-taxes (PILOT) program, where the casinos would make payments similar to that of a recovery plan.
The legislation would seek to balance property-tax payments of land-based and mobile casinos. The bill would authorize payments in lieu of taxes of $150 million each year, over a two-year period. Then a gradual payment of $120 million annually would be made for the following three years.
It would ensure that under US gambling laws, tax payments match gross gaming revenues. This would mirror the gaming industry’s financial obligation to strengthen Atlantic City, fund the school district as well as state programs for seniors and disabled residents, and help Atlantic County.
Casino industry to give taxes and benefits in 2015
Then there is the investment alternative tax to hit the casinos. The levy would redirect taxes from gaming revenues to settle the debts of Atlantic City. By diverting 1.25% on gross gaming revenues and 2.5 % on mobile casino gambling revenues, residents won’t have to cough up over $25 million to $30 million per year in taxes.
Also, the PILOT program would see the gaming industry providing a baseline health-care and retirement package for their employees. All these provisions would take place over a 15 year period, with a commission being set up after 13 years, to re-examine the city’s situation and settle on what next needs to be done.
Recap of Atlantic City woes
According to Sweeney, Atlantic City officials, state legislators, the governor, the gaming industry, casino workers, and residents are all in on the plan to stabilize and diversify the economy of Atlantic City. Atlantic City, hard hit by the economic crisis resulted in 4 Atlantic City casinos.
Revel Casino, the doomed fifth, had cinched a deal with a Canadian company, but the deal went sour when a debt dispute rose over the construction of the casino’s costly power plant. A court hearing on a possible sale to the runner-up, Florida developer Glenn Straub, is projected for January 5.
Even so, a total of 8,000 workers lost their jobs from the closures and casino revenue continued its plummeting course since 2006. Atlantic City is the only city in New Jersey whose total property value has fallen to 55 % in five years.
Although Atlantic City’s combined tax base was worth $20.5 billion in 2010, come 2015 it will stand at $9 billion. It will further decline to around $7 billion over the next 10 years if a solution is not found to prevent the city from going bankrupt.
The $210 million in property-tax revenue produced last year will not happen again and Atlantic City Mayor Lorenzo Langford, who backs the bill, said the casinos’ payments “would be comparable to what they would be paying if we did the assessment today.”
Although Sweeney knows that his PILOT legislation won’t make the city’s financial issues all disappear he thinks it would nevertheless ‘help the city, local and county taxpayers, and the casino industry through the hard times’. However, some Americans beg to differ.
In response to Sweeney’s published plan, one web surfer wrote that Casinos are NOT a foundation for a strong local economy. Actor Steve Schirripa, reiterated his view on TV by saying “make it a city instead of a slum with casinos”. For, once again, officials are relying heavily on the input from the the casino industry to save the struggling Atlantic City.
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