Don Guardian Assembly Member for the Press
In December, I went to Trenton to testify against the recent PILOT casino rewrite. I did this because I believed then what I still believe now: the changes hurt the taxpayers of Atlantic County. The severity of the bruises now depends on the outcome of the county’s lawsuit.
But the PILOT is only one piece of the puzzle as to how Atlantic City and the region stays afloat.
Seven years ago, Atlantic City was $600 million in debt and was on the verge of bankruptcy. As mayor facing this tax cliff, we argued in Trenton that the city was not getting its fair share of the tax revenue it generated at all. Beyond PILOT, we fought for new sources of funding from ACA, IAT, TA and CMPTRA.
To explain: ACA is a direct payment from the casino to the city. The IAT is the casino’s money that will be used to pay off the town’s debt. TA is temporary public funding to help municipalities through budget crises. CMPTRA is state funding to urban communities to prevent bankruptcy. In 2021, Atlantic City received from the ACA $5 million, from the IAT $22.5 million, from the TA $7.7 million, from the CMPTRA $26.1 million, from taxes 43 .8 million dollars and PILOT 66.7 million dollars. That’s a total of $171.9 million in 2021 alone.
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Each year, approximately $65 million has been brought to the city through this alphabetical soup of programs. Every major project during my time as mayor, such as Bass Pro Shops, rebuilding Boardwalk, repaving Pacific Avenue, SJI headquarters, 600 NoBe, and the Atlantic City campus in Stockton, has been funded in part by these programs. And just like the PILOT, these programs could end soon. But unlike the PILOT, no legislation will be needed to end it. They can disappear with the stroke of a pen.
PILOT as we knew it is gone, which puts me on high alert about these other programs leaving town with it. While I think Atlantic City deserves to keep more of its tax revenue, it’s clear that in the years to come we stand to lose what little we get back from Trenton.
What would the voters of the 1976 referendum think of the current situation? At the time, the game was meant to provide a “unique tool for urban redevelopment” that would restore “Atlantic City as the world’s playground and the primary visitor center of the eastern United States”.
Forty-four years and tens of billions in tax revenue later, we are still waiting.
Not because the vision was unfounded. Travel 2,500 miles west and you’ll find Las Vegas residents who will prove it’s possible. In their state, casino taxes are wisely reinvested in the form of tax breaks that negate an income tax and supplement some of the lowest property taxes in the country. Some things that happen in Las Vegas shouldn’t stay there.
The casinos for their part held their end of the market. From the beginning, the gaming industry has supported South Jersey, providing well-paying jobs that have anchored thousands of families in Atlantic County.
But the state? Not even close. It’s been smoke and mirrors for a while now.
Consider the most recent example: during his testimony in defense of the PILOT rewrite, former Senate Speaker Steve Sweeney swore that continuing to tax Internet gambling and sports betting under the definition of PILOT’s gross gaming revenue would put four casinos out of business. .
This redefinition directly affects the county, city, and city school district going forward. What he failed to mention is that the state will continue to use the old dictionary.
Independent of PILOT, Trenton took in $244 million last year in tax revenue from Atlantic City-based Internet gambling and sports betting. Unimpeded, the state will continue to use the old definition to its advantage.
Rules for you, but not for me.
Meanwhile, casinos face unprecedented competition and a delayed recovery from the pandemic. More than ever, the state taxes they generate need to be reinvested here to keep this source of revenue alive and the main driver of the local economy.
That’s why I co-sponsored Assembly Bill 646 with my colleagues in Cape May County to reinvest 100% of tourist tax money back into the tourism industry.
It’s time to admit that Trenton has a spending problem. They’ve taken $14 billion in taxes and fees from casinos since 1978 and wasted it. They did so compulsively at the expense of projects that would have supported the social and infrastructure needs of the region. What is needed now is intervention.
Don Guardian of Atlantic City is a Republican representing the Second District (most of Atlantic County) in the New Jersey Assembly.