Voters Could Decide Next Year on Allowing Casinos in North Jersey
Competing plans pass on proposals for 2 new casinos.
New Jersey’s assembly on Thursday approved Governor Chris Christie’s changes to legislation that Atlantic City needs to remain solvent this year, which now heads to the state senate for a vote.TRENTON — A pair of competing proposals to ask New Jersey voters to approve expanding casino gambling to the northern part of the state advanced in the state Legislature on Thursday — despite fears from south Jersey lawmakers that the plans would devastate already struggling Atlantic City.TRENTON, N.J. (AP) — State Senate president Steve Sweeney refused to back off his demands on ownership requirements for two casinos proposed for northern New Jersey as serious differences remained Thursday between competing plans for a statewide referendum on the topic. Christie’s conditions on a package of bills – including a set “Payment in Lieu of Taxes” for casinos and redirected aid for the city – aimed at keeping Atlantic City solvent and free of crushing tax appeals in future years.
Last month, Christie returned to legislators bills that would diverted some gambling funds that the struggling resort city was counting on to help close a $101 million deficit this year. Many suggest proponents of the change are rushing this through. “All of the studies that I have reviewed and everything that I’ve indicated is that it is ill advised, ill informed and ill timed right now,” Brown told colleagues. The legislative package also includes a measure that would establish fixed payments from casinos instead of levies based on real-estate values, which would prevent tax appeals that strain the city’s finances. “These bills are geared to stabilize the property taxes,” said Assemblyman Vincent Mazzeo, a Democrat who represents Atlantic City, Thursday on the floor before the vote. “It will help invigorate and get investment into Atlantic City.” The changes requested by Christie include having the state’s local finance board collect the revenue from the casinos and make its release dependent on the city’s fiscal progress.
The main sponsor of the amendment in the Assembly, North Jersey Democrat Ralph Caputo, says the change is needed to stem other states like Pennsylvania and New York from siphoning off customers. “The only way we’re going to be able to save the gaming business in this state is allowing the voters, as they did in 1976, to make a decision about where they want to have gaming in this state,” Caputo said. If a unified plan is not decided by Monday, the Legislature could simply choose one of the two versions and vote on it next week. “I am not going to betray southern New Jersey and let Atlantic City fall into the ocean,” said Sweeney, a Gloucester County Democrat. “That’s not happening. I’m pretty strong where I’m at.” Sweeney said his insistence that both new casinos be owned by companies that already have an Atlantic City casino is essential to more tightly linking the casino industry in the north with Atlantic City, which continues to struggle from ever-increasing competition that forced four of its 12 casinos to shut down last year.
Sweeney’s bill would allocate no more than a third of all gambling tax revenue to help redevelop Atlantic City, though “not one penny” would go to Atlantic City’s municipal government. Jim Whelan, D-Atlantic, said of the Senate’s failure to vote on the bills: “The dialogue will continue and I am hopeful that we can get them done before the lame duck session is concluded.” One bill spells the end of the Atlantic City Alliance marketing group, the people who created Do AC, for the purpose of redirecting its $60 million funding over the next two years to the city itself.So dependant on this legislation is Atlantic City, that its state-approved $262 million 2015 budget contains a $33.5 million revenue line item called “Casino Redirected Anticipated Payment,” affectionately, or perhaps desperately, acronymed CRAP. “We need the money to balance the budget,” Atlantic City’s Finance Director Michael Stinson said this week. Under the Assembly plan, 35 percent of tax revenue over the first 15 years would be devoted to Atlantic City, 63 percent to programs for seniors and the disabled, and the remaining 2 percent to the state’s struggling horse racing industry. But even with that welcome news, the city was fighting a battle on another legislative front Thursday as committees in both the Assembly and Senate approved differing bills calling for a referendum to end Atlantic City’s in-state monopoly on casinos and allow two North Jersey gambling houses.
Local officials and legislators have objected strongly to the idea, and continued to do so at hearings Thursday, warning of dire, if not fatal, consequences to Atlantic City’s economy.And the city is also battling in court its most succesful casino, the Borgata, staving off deadlines to repay money from the damaging tax appeals the PILOT legislation is designed to end. According to Debtwire, the city received a temporary court reprieve on Borgata’s attempt to collect on an $88 million debt, but still owes Borgata $60 million by Saturday. Senate President Stephen Sweeney (D-Gloucester) — south Jersey’s top lawmaker and a likely 2017 candidate for governor — said he hopes the Assembly would agree to the deal by Monday. Though no locations are spelled out in either bill, the most commonly mentioned proposals for new casinos are at the Meadowlands Racetrack in East Rutherford, and in Jersey City. Sweeney said northern casinos would help New Jersey fight increased competition in neighboring states, giving Garden State residents a reason to remain in state instead of traveling to Pennsylvania, New York, Connecticut, or Delaware.
The struggling casino resort has been on the brink of financial collapse since losing four casinos in 2014 amid a general downturn in total casino revenue. Chris Christie when he vetoed it last month because he didn’t think it asked enough accountability and structural changes from the city, given the relief it would get. Joe Kelly, president of the Greater Atlantic City Chamber of Commerce, said the resort could lost two or three more casinos and 14,000 more jobs if casino is expanded to north Jersey. “We can’t stand and do nothing,” he said. “We do nothing, and Atlantic City dies, the state of New Jersey dies, the revenue dies. Atlantic City Council President Frank Gilliam said he had concerns about the long term implications of creating a set PILOT amount for casinos to pay, but that the city’s dire financial needs outweighed any long term concerns for now.
This is about keeping the tourist industry alive in New Jersey.” To place a question on the ballot, a resolution needs to pass both houses of the Legislature by a simple majority in two consecutive legislative years. The casinos had agreed not to file future tax appeals if the payment-in-lieu-of-taxes (PILOT) system were adopted.The city’s Emergency Manager has been in negotiations with Boyd Gaming, parent company of Borgata, to settle the debt.
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