Atlantic City´s budget will suffer if the casino industry thrives this year
Friday 07 de June 2019 / 13:40
⏱ 2 min read
(New Jersey).- Just when it seems the seaside resort is poised to get its fiscal house in order, an obscure provision buried within the casino PILOT law is going to deliver yet another setback
If Atlantic City’s casinos eclipse $3 billion in total gaming revenue this year, the resort would actually receive about $14 million less from the industry in 2020 because of a crediting mechanism built into the 2016 legislation.
The 10-year PILOT, or payment in lieu of tax, bill was intended to stabilize Atlantic City’s finances by temporarily eliminating the volatility of costly tax appeals from the casinos and provide a predictable revenue stream for the city, the county and the school district based on annual gaming revenue.
However, the state Department of Community Affairs — the agency with direct fiscal oversight of Atlantic City following the 2016 takeover — noted in a budget document that even if PILOT payments were to increase because gaming revenue reached the next fiscal benchmark, the city would experience a net loss because of a crediting concept in the law that holds casino tax payments at 2015 levels.
The credit will be paid for with money from investment alternative tax funds that the city is statutorily obligated to use for municipal debt service.
In 2018, Atlantic City received nearly $9.7 million in IAT funds. The 2019 municipal budget, which has not been formally adopted, anticipates more than $13.8 million from IAT funds.If the casino industry meets the $3 billion gaming revenue threshold outlined in the PILOT, Atlantic City will not receive any IAT funds in 2020 or 2021.
"We are aware of the IAT issue and working with the City, particularly its finance staff, to adapt to its near and long-term impact on the City's finances, which, as it stands now, is negative in the short-term, but positive 2022 and beyond," said Lisa Ryan, spokesperson for the state Department of Community Affairs.
The Mayor's Office did not return request for comment.
Categoría:Casino
Tags: casinos,
País: United States
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