Momentum Building in Support of the Casino Property Taxation Stabilization Act
The “Casino Property Taxation Stabilization Act”, a bill that would transform how the property taxes on Atlantic City casinos are assessed, continues to languish in the halls of the state legislature. The PILOT bill, as it’s known to lawmakers, was introduced three months ago, but concerns about the future of Atlantic City continue to hurt prospects of its passage.
The plan would not require the casinos to make the standard payment on their property taxes. Instead, the casinos would join together to make a cumulative payment of $150 million to the state. Such a deal is called a PILOT payment in legislative language.
$150 Million for First 2 Years
The $150 million payments would happen for the first two years of the plan. For the next 13 years of the 15-year payment schedule, the casinos would pay $120 million cumulatively.
The three major proponents of PILOT are State Assemblyman Vince Mazzeo, State Sen. Jim Whelan, and State Senate President Stephen Sweeney. Three three Democratic lawmakers want to end the annual process by which the casinos take the state to appeals court to lower their yearly property taxes.
The traditional process leads to court costs for both sides of the dispute, while it also makes it next-to-impossible for Atlantic City to plan financially. Steve Sweeney hopes the deal would make it easier for financial planners to guide the city out of its current turmoi. Sweeney has a 5-year plan to turn Atlantic City around, though it has been a controversial plan.
“Stop the Bleeding”
Using the slogan “Stop the Bleeding“, the bill breezed through committee and appeared to have bipartisan support in both houses of the legislature. It stalled on the floor of the Assembly, though. Democrats have tried to explain that failure in several ways, but the most common theory is the Governor Chris Christie hamstrung the bill by refusing to take a stance on it. With no way of knowing whether the bill would pass, lawmakers have been loathe to themselves take a stance on a bill that might do no good, but make their voting record look bad.
Assemblyman Chris Brown (R) had been scathing in his criticism of the PILOT plan. He called it “corporate welfare”, because it gives gaming companies a major tax break while burdening Atlantic City residents with an additional $9 million in property tax increases.
Key Republicans Lend Support
Recently, though, the Republicans have begun lining up behind the Casino Property Taxation Stabilization Act. In fact, Chris Brown now appears to be siding with two prominent Republican leaders to support the bill. The other two GOP members are Atlantic County Executive Dennis Levinson and Atlantic City Mayor Don Guardian.
Dennis Levinson and Don Guardian joined forces to assure a provision in the plan that would provide Atlantic City with 13.5% of the PILOT revenues. That percentage squares with the percentage of property tax revenue Atlantic City traditionally has collected from the AC casino property taxes. After such a deal came into being, the two men were naturally throwing their weight behind the PILOT. Chris Brown stopped criticizing the plan and has now signalled that he joins Levinson and Guardian in supporting the bill.
Casino Association Supports PILOT
The Casino Association of New Jersey released a statement in January 2015 coming out in favor of the bill, saying the PILOT was the only chance Atlantic City casinos had to stay in business. The Casino Association said in a joint statement, “Make no mistake. Without this plan, certain casinos that remain in Atlantic City are at risk.”
Despite the bipartisan support, the Democrats have yet to put the bill up for a vote. They have yet to state a coherent reason why, though Chris Christie and Carl Icahn are considered the main culprits.
Vince Mazzeo vs Carl Icahn
Vince Mazzeo stopped a vote on the PILOT in December 2014, saying Carl Icahn did not deserve to profit from such a bill at a time that he was using the courts to take advantage of the Trump Taj Mahal’s workers union.
Icahn at the time was involved in 11th-hour negotiations to keep the Trump Taj Mahal open. He also had went to a labor judge in October 2014 to have a court take away the pension and health benefits of the workers union at the casino, while also negotiating to have those benefits stripped away permanently.
Those actions appear to have caused Vince Mazzeo to quell the vote on the PILOT. When asked his thoughts at the time, Mazzeo said Carl Icahn was, “actually holding up property-tax…reform for the City of Atlantic City.“
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