An Atlantic City rescue plan unveiled this week by two New Jersey state senators would cut property taxes by 28 to 43 percent for the struggling casino industry, which has seen four of its 12 gambling halls go out of business this year.
The plan by state Senate President Steve Sweeney and Sen. James Whelan would let casinos collectively pay $150 million in lieu of taxes for two years, and then $120 million a year after that, assuming gambling revenue stays at a certain level.
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A spokesman for Atlantic City Mayor Don Guardian told The Associated Press the city's casinos — excluding the Atlantic Club, which only operated for 12 days in January before shutting down — paid $210 million in property taxes this year.
If the Sweeney-Whelan bills are enacted as proposed, that would mean a discount of more than 28 percent for the first two years, and a 43 percent reduction after that.
Kevin Ortzman, president of the Casino Association of New Jersey, said the bills are essential to letting casinos plan their finances effectively.
"Atlantic City needs this type of stabilization, which is critical to maintain the thousands of jobs and investment dollars in the market and enable further diversification to stimulate growth," he said.
After two years of $150 million payments, the casinos would owe $120 million a year, as long as Atlantic City's annual gambling revenue is between $2.2 billion and $2.6 billion. If it falls between $1.8 billion and just under $2.2 billion, the payment would be $110 million. If revenue is between $1.4 billion and just under $1.8 billion, the payment would be $90 million, and if it falls below $1.4 billion, the annual payment would be $75 million.
Payments could rise to as much as $165 million a year if casino revenue rebounds to between $3.4 billion and $3.8 billion — a level that seems unlikely in the near future given Atlantic City's eight-year revenue decline and the continued increase in casinos in neighboring states.
The plan also would redirect a casino redevelopment tax to pay off $25 million to $30 million of Atlantic City's debt each year, and would create a new category of state education aid applicable only to Atlantic City to help hold down local taxes in return for school spending cuts. The Board of Education has already begun that effort, voting Tuesday night to close an alternative high school it operates as of Dec. 31, and put its building up for sale.
Students attending the program would be transferred to a program at the main high school, or to an alternative county-run program in Mays Landing, about 17 miles west of Atlantic City.
Wayne Parry can be reached at http://twitter.com/WayneParryAC