Atlantic City's Golden Nugget casino dropped a threat Monday to file a lawsuit blocking a package of tax relief for Atlantic City's eight casinos.
The casino's general counsel, Steven Scheinthal, told The Associated Press that proposed changes to a tax bill the Golden Nugget had vehemently opposed should be enough to protect it.
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The Golden Nugget said last week that its annual property taxes would have risen from $4.7 million to $8.1 million under a bill introduced by state Senate President Steve Sweeney. But changes made since then would 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 for five years.
The change, combined with the elimination of the Golden Nugget's $2 million annual share of payments to help fund the Atlantic City Alliance, a marketing group being abolished by the state, satisfied the casino. Last week, its owner, the Texas billionaire Tilman Fertitta, threatened to seek a court order blocking the plan.
"We're OK with it now," Scheinthal said Monday. "We're protected for five years; that's a good thing. At least we have some stability and we know our taxes aren't going to rise."
At issue is one of several state-led efforts to help Atlantic City's crumbling casino industry and its even worse municipal finances. Sweeney's package of bills lets the eight surviving casinos make payments in lieu of property taxes for 15 years.
The formula calculating the payments uses the amount of each casino's annual gambling revenue, how much property they own, and how many hotel rooms they have.
Under calculations made by the Golden Nugget's legal staff, its taxes would have risen to $8.1 million a year from $4.7 million. Resorts, which was charged $4 million in taxes this year, would pay $8.2 million, an increase of $4.1 million, the largest of any Atlantic City casino. Bally's, which was charged $8.3 million this year, would pay $10.9 million.
The bill still grants big tax breaks to Atlantic City's larger casinos. According to the Golden Nugget's calculations, the Trump Taj Mahal would save $9.8 million a year, the Tropicana would get a $9 million reduction and Harrah's would save $10.8 million a year.
The legislation has now passed committees in the Senate and the Assembly.
The key to the plan is the tax stabilization bill, which lets 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.
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 use the Atlantic City Alliance's $30 million annual budget to help the city in other ways.
Wayne Parry can be reached at http://twitter.com/WayneParryAC