By Sarah Fertsch
Staff Writer
Two weeks ago, Governor Murphy signed into law a new plan (added onto an already existing bill) to give major tax breaks to casinos in Atlantic City, claiming that the entertainment industry in South Jersey has been severely affected by the pandemic. Payments in leu of taxes, or PILOT for short was developed as a sort of guarantee to fund the government. The new law was brought about after many casinos had their properties reassessed after their values dropped. The money given back through their successful tax appeals left Atlantic City and Atlantic County with a budget crisis.
S4007 was signed by Murphy after it passed through the House in its last voting session for 2021. Murphy gave no explanation for his approval, instead simply signed it into law. Sponsors of the bill say that the action was necessary to keep the casinos profitable, limit job losses, and stave off several casino closures. The casinos they claim that may have been forced to close were not named.
The new law is an amended version of an already existing tax break available for casinos since 2016. This was a time when Atlantic City was reeling after the 5 casinos had closed. Now, the legislature has almost doubled the savings amount. The law exempts sports betting and online gambling platforms that have become popular in recent years. Members of the state legislature claimed that while online gambling has boosted profits for the casinos, the numbers are skewed, and in-person gaming has decreased significantly in Atlantic City.
Because of the passing of S4007, casinos will pay $55 million less than what they were previously forking over to the government. This amount will range between $30 and 65 million until 2026.
Critics say that the new law is controversial because despite the pandemic, casino revenues are up from previous years. Outgoing Senate President Sweeney (D-Gloucester) says that as an expert in the casino industry, he knows that this legislative action prevents job losses in Atlantic County. Sweeney has developed the reputation of supporting every benefit for Atlantic City. “If this law hadn’t passed, up to four casinos are likely to close,” he said.
One significant claim against the tax break is that more of the burden to fund community services will fall on vulnerable taxpayers. Don Guardian, a former Atlantic City major, said that Atlantic County residents will be breaking their own backs to ensure the success of the tourism industry in their hometowns. Atlantic County Executive Dennis Levinson has filed a lawsuit against the Murphy administration. “It’s just flat out unfair,” he said.
Rosie Redner, a resident of Atlantic County and employee of one of the AC casinos, says that the casinos should be as responsible for funding schools and infrastructure as households. “The casinos provide jobs so we can make money, only so we can bail them out with our paychecks,” she said. “The trickle-down effect that politicians preach simply doesn’t work. It makes our lives harder.”
This law is the latest in a series of government actions that monopolize city-hall decisions in Atlantic City and other beach towns. In January 2021, Murphy signed an executive order to build wind farms off the coast of Brigantine. Over the past four years, the legislature has renegotiated union contracts for casino workers, selling city assets, and overturning decisions made by the Atlantic City Council.
“This has to be a true partnership and I think everyone benefited from that,” said Murphy in a press conference. “I personally think in the spirit of partnership, we can’t walk away from each other, and there’s a lot of unfinished business, including exciting new economic opportunities.”
This “partnership” began as a 2017 campaign promise to revitalize Atlantic City by empowering the state to act as a parent to the city. Murphy claimed to be “working with the community,” but has not reached out to the local government. Atlantic City leaders have protested this relationship, arguing that Murphy is “big-footing” the democratic process for residents, 39,000 whom are minorities.
What do you think of the state’s relationship with Atlantic City? Is it helpful or hurtful? Join the conversation on Facebook @ShoreLocalNewsmgazine or email the author at shorelocalnews@gmail.com.
