TRENTON, N.J. – A tax stabilization plan making its way through the state Legislature should keep Atlantic City's Trump Taj Mahal casino from closing, the city's mayor said.
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Republican Mayor Don Guardian testified Monday in favor of the package in Trenton and said the bills should be enough to keep the endangered casino open because they give its proposed new owner, billionaire Carl Icahn, most of what he has asked for in talks to save it and its 3,000 jobs.
"I do believe this legislation is going to save the Taj from closing," Guardian said. "It's exactly what the proposed new owner has been asking for."
The casino's owner, Trump Entertainment Resorts, has set a Dec. 20 closing date for it. It had no immediate comment on Monday, and Icahn declined to comment.
Trump Entertainment plans to hand itself over to Icahn, who would cancel $286 million in company debt he owns. He would invest $100 million into the Taj Mahal, but only if its main union, Local 54 of the Unite-HERE union, drops its appeal of a court-ordered cost savings package.
The plan approved Monday by the Senate budget committee lets the Trump Taj Mahal and Atlantic City's other seven casinos know how much they will have to pay each year in lieu of property taxes and lets the city know how much revenue it can expect. The casinos collectively would 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, where four casinos have closed this year.
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The bill was amended Monday to help any casino that winds up being billed more under the payment in lieu of taxes program than it did this year. The amendment credits the amount of the overage toward the casino's reinvestment tax obligation.
A different bill included in the package would redirect that investment tax, currently used by the Casino Reinvestment Development Authority, to pay off $25 million to $30 million of Atlantic City's debt each year.
Other measures would increase school aid to Atlantic City, mandate a minimum level of benefits for casino workers and eliminate the Atlantic City Alliance, the marketing arm of the casinos, and use its $30 million annual budget to help the city in other ways.
The legislation is part of several state-sponsored initiatives being considered to help stabilize Atlantic City, whose casino revenue has plunged from $5.2 billion in 2006 to $2.86 billion last year and is certain to fall below that this year. A task force convened by Republican Gov. Chris Christie has recommended employing an emergency manager with vast control over Atlantic City's spending, temporarily freezing taxes on non-gambling property and allowing the city to skip pension payments for several years.
Guardian said the burden of property taxes has fallen on the owners of the remaining casino properties.
"It's unsustainable, but we think we can fix it," he said.
Democratic state Senate President Steve Sweeney said the state will consider expanding casino gambling beyond Atlantic City in coming years. But he said the tax aid package is needed now to help keep the city from going bankrupt.
Wayne Parry can be reached at http://twitter.com/WayneParryAC