Atlantic City: Assembly PILOT bill to be heard by Appropriations committee on Monday

The bill (A5587) was quietly moved from the State and Local Government committee, where it had sat after introduction in May and where it has remained unconsidered for months.

The Assembly bill, like the Senate version (S4007), removes sports and internet gaming from gaming revenues in the PILOT calculation. But A5587 sets the base 2022 PILOT payment at $125 million, which is $15 million higher than the base payment in the proposed Senate bill.

The last pre-pandemic basic PILOT payment, however, made in 2020 based on 2019 revenues, was $150 million. And the Office of Legislative Services estimated casinos would owe $165 million in 2022 under existing law, based on 2021 revenues, which had greatly rebounded.

The Senate version, sponsored by state Sen. President Steve Sweeney, passed the Senate Budget and Appropriations committee on Monday, after Sweeney told the committee four casinos were in danger of closing without the legislation.
Sweeney did not, however, provide proof of his prediction or any data to back it up.

A Bally’s spokesperson reached out Tuesday via email to stress that Bally’s, considered a smaller property, was not in any danger of closing.

“I think there is a middle ground, after talking to casinos and everyone involved,” Polistina said. “We do need to change the existing PILOT, but it should be a middle ground to protect county taxpayers.”

He is suggesting a higher 2022 base PILOT payment than is in the Sweeney bill, and a higher guaranteed payment to the county. The county’s share should be more like what it received in 2020, he said, which was about $20.5 million — not the $17.5 million it got in 2021, based on depressed 2020 pandemic casino revenues.

There are two issues of contention with the existing PILOT legislation, Polistina said. They are: the way each casino’s share is calculated, based on the number of rooms and square feet of gaming space; and the end in 2022 of a crediting mechanism that had allowed casinos to keep a portion of their Investment Alternative Tax payments.

“If you are a property not seeing an increase in revenue, but have a lot of rooms and casino floor, you could see an end result in higher taxes, if other properties are doing better,” Polistina said.

Casinos will pay their IAT taxes in full for the first time under the PILOT, whether the existing law continues or the amended one passes. They will pay 1.25% on brick-and-mortar gaming revenues and 2.5% of internet gaming revenues. It will be paid mostly to Atlantic City and entities in the city for debt payments, public safety and more. It is expected to total about $50 million.

A5587 was introduced in May by Assemblyman John Armato, D-Atlantic, and immediately sent to the Assembly State and Local Government Committee, where it sat unconsidered for months. Right after introducing it, and after Atlantic County officials expressed concerns county taxpayers would be harmed, Armato said it would evolve before moving further.

That committee is chaired by Assemblyman Vince Mazzeo, D-Atlantic, and it met Thursday but did not take up A5587.

Last week Armato removed his name from the bill and Assembly Majority Leader Louis Greenwald, D-Camden, Burlington, took over sponsorship.

Greenwald did not immediately respond to requests for comment about why it was removed from the State and Local committee and fast tracked to appropriations without the information being updated online.
Armato said at the time he dropped off the bill because he had not been re-elected and felt it should be handled by someone who was coming back in the 2022-2024 session.

The amended PILOT adds two additional years of a $5 million payment from all the casinos to Atlantic City, in a third revenue stream.