ATLANTIC CITY — The city will benefit financially if a bill passes to amend casino payments in lieu of taxes, even though sports and internet betting would be removed from the calculations, city officials said during a news conference Tuesday.
“At first blush it brings (PILOT) revenues down to $110 million,” Mayor Marty Small Sr. said of what would be the base PILOT payment for 2022 in the bill. That’s compared to a high of $150 million in 2020.
But the bill offsets any decrease by establishing new pots of money for the city to use for infrastructure and clean and safe streets, Small said. It also guarantees the city will get at least as much as it did this year going forward, with a 2% increase annually, he said.
Small and his adviser, former Superior Court Judge Steven Perskie, did not provide any financial analysis or budget estimates.
People are also reading…
“Under the revised formula they will collectively pay more in 2022 than in 2021, and more in 2023 than in 2022,” Perskie said of the resort’s nine casinos.
Perskie, who drafted the legislation that became the New Jersey Casino Control Act as an assemblyman in the 1970s, said it will also protect the financial stability of casinos here. He said he based his opinion on reading the bill (S4007) and an analysis by the state Department of Community Affairs and the state Department of Treasury, and Small said he has had many conversations about it with state officials.
It is time to dissolve the casino PILOT, not make it worse. The Casino PILOT bill is a form …
The bill is sponsored by state Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland. Sweeney’s office has declined comment on specifics of the bill. Several sources with knowledge of the bill’s origin have said Sweeney’s bill and an Assembly version sponsored by 2nd District Assemblyman John Armato were both written and are being pushed by members of the Murphy administration rather than the lawmakers.
A Casino Association of New Jersey spokesman said Tuesday night that the amended bill narrows the window on PILOT payments to between $100 million and $120 million, based on brick-and-mortar casino revenues. But it also provides the full amount casinos pay in investment alternative taxes to the city — which he estimated at up to $60 million.
It also continues a $5 million per year, per casino payment to the city for debt relief through 2026. Under the original bill, that $45 million payment would phase out after 2023.
The IAT is a 1.5% tax levied on gross gaming revenues and 2.5% on internet gaming gross revenues. The current law gave casinos the ability to keep some of that revenue if their payments topped pre-PILOT property tax obligations, but that clause was due to end in 2022.
The base PILOT payment of about $150 million in 2020 was based on 2019 revenues. It fell somewhat in 2021 due to the impact of the COVID-19 pandemic on the industry in 2020, but it was less of a drop than expected because of strong internet and sports gaming revenues.
Perskie said he could not share the state’s analysis with the media and referred the request to the DCA. The DCA — which oversees the state takeover of the city — could not immediately be reached for comment.
A bill to remove sports and internet gaming figures from casino payment in lieu of taxes cal…
“What this bill does is change the relative formulas of the money presently being raised and spent from the industry,” Perskie said. “There is a story out there that casinos are doing very well and this is an effort to reduce their obligations. That is not in fact the case. It will reduce to a certain extent one of the formulas, but will be offset in the change in IAT formula.”
Perskie acknowledged, however, that the amendment will also protect several casino properties which would have faced a drastically higher IAT bill in 2022 under the current PILOT legislation.
“If we don’t pass (the PILOT amendment bill), a financial analysis undertaken by the state ... suggests the impact of the increases that take place in 2022 would put a significant portion of the industry in extreme financial distress,” Perskie said. “It’s too much too soon.”
He said the amended bill does spread out increased payments over the next five years and “along the way of doing so puts more money into Atlantic City.”
“The IAT is going to continue to increase at a faster rate than can be expected from the table games and in-person gaming,” Perskie said. “Put all that together, and it says the revenue stream to the city of Atlantic City from this group of taxes is, as the mayor said, going to increase.”
Perskie did not provide figures on how much the city expects the IAT taxes to increase.
“It’s not clear how many dollars over what time, but what is clear is a guarantee in this process that taxpayers of Atlantic City will benefit from this legislation,” Perskie said.
Both Small and Perskie stressed that they only studied the bill’s effect on the city.
“This bill could be interpreted differently by the Board of Education and the county,” Small said, since the PILOT funds based on gaming revenues are shared with those two entities. “We’re speaking about how it benefits us.”
Atlantic County officials have criticized the proposed bill and said it will harm county taxpayers.
The county share of the base PILOT had been 13.5%, which the county had to fight in court to win. It was $17.5 million this year, the Casino Association spokesman said.
If the amendment bill passes, the payment to the county in 2022 and going forward will be a flat $17.5 million a year, the Casino Association spokesman said. If revenues fall, that amount could fall by about $1.35 million in some years and by $1.2 million in others, he said, but it could also increase, and if revenues stay relatively stable, payment will increase by 2% per year.
Welcome to the discussion.
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.