The draft of a new bill to stabilize casino property taxes in Atlantic City shortens the payment in lieu of taxes time frame to 10 years and encourages the county to get more involved in solving the city’s financial crisis.
A copy of the draft was provided to The Press by state Sen. Jim Whelan, D-Atlantic, during an editorial board meeting Friday afternoon. It could be introduced in the Legislature as soon as Tuesday, along with a bill to give the state control over the city’s finances, he said.
Some of its language could change, he cautioned.
Instead, Atlantic City casinos will collectively pay an amount that starts at $120 million per year in 2016, and the amount will be adjusted annually according to total gross gaming receipts, or total revenue if GGR falls precipitously.
It is the same framework that was in the most recent PILOT bill Gov. Chris Christie pocket-vetoed in January.
The new PILOT bill includes what were separate bills to redirect investment alternative tax proceeds to the city and to abolish the Atlantic City Alliance.
This version of the bill still does not include language specifying what percentage of the casinos’ payments should be shared with Atlantic County.
Language in the statement portion used to say 13.5 percent was expected to go to the county. Now, it says the county over the last three years has received an average of 10.4 percent of city taxes, but it would be expected to get the full 13.5 percent if it takes “additional responsibility for and on behalf of Atlantic City.”
County Executive Dennis Levinson said he met Thursday with city officials to discuss ways the county can help, and he was disappointed the 13.5 percent was not guaranteed in the bill.
Assemblyman Chris Brown, R-Atlantic, said he will keep working to fine-tune the language on the 13.5 percent, but he is happy several changes he suggested have been incorporated, including the shorter time frame and charging casinos regular property taxes on new construction and improvements.
Whelan said he is happy the county is stepping up to drive economic diversification and help finance the Stockton Atlantic City Campus in the Chelsea section.
“The county has not historically been very aggressive,” Whelan said. “Not just the executive, but the other folks brag about their bonding ratio. But we have the highest foreclosure rates in the country and high unemployment. It’s time to spend some money.”
Earlier estimates from state Senate President Stephen Sweeney predicted the bills would be introduced by Feb. 11, in order to be finalized in time to get aid to the city by April 1, when the city was estimated to run out of cash.
The new PILOT draft keeps the increase in additional casino payments, Whelan said. The casinos would make $30 million in additional payments for 2015 and 2016, followed by $15 million in 2017; $10 million in 2018; and $5 million for years 2019 through 2023. That is a total of $110 million, the same that was in the pocket-vetoed bill and considerably more than the $60 million that was in the early PILOT bill.
The draft also requires the state to issue a report on how well the program is working in 2021, rather than 2026, which means upward adjustments in casinos’ payments could be made five years earlier if it turns out the PILOT severely shortchanges the city compared to a traditional property tax.
The range of payments the casinos are expected to pay annually remains from $165 million if gross gaming revenue in the preceding year is $3 billion to $3.4 billion; down to $90 million if that revenue is $1.8 billion or less and aggregate gross revenues from all other sources have not increased to make up for prior year losses.
In effect, it leaves the floor for PILOT payments at $120 million for gross gaming revenues between $2.2 billion and $2.6 billion, since that is the lowest tier in which all other sources of revenue are not counted.