TRENTON - State Senate President Stephen Sweeney proposed
a plan Monday to stabilize Atlantic City's finances, as the resort grapples
with mounting debt and decreased revenues resulting from casino closures and
property-tax appeals.
Sweeney (D., Gloucester) described his plan as a
"first step" toward revitalizing the city, where four casinos have
closed this year. A group of state, business, and labor leaders formed by Gov.
Christie is to meet Wednesday for the second time since September.
"Atlantic City has been hit by an economic
hurricane," Sweeney said at a Statehouse news conference late Monday
afternoon, joined by State Sen. Jim Whelan and Assemblyman Vince Mazzeo, both
Democrats from Atlantic County. "Eight thousand people have lost their
jobs. We are dealing with a very serious fiscal problem. One thing we don't
want is Atlantic City to become Detroit."
Sweeney unveiled legislation that would allow casinos to
make payments in lieu of taxes (PILOT) of $150 million a year for two years,
then require guaranteed tax payments, tied to gross gaming revenues, over the
next 15. Sweeney would not say how the revenue would be distributed between the
municipal government and school district.
"Any mayor of any city will tell you, one of the
most crucial things is to have some stability in your taxes," said Whelan,
a former Atlantic City mayor. "We have not had that in Atlantic
City."
Atlantic City's assessed value dropped from $20.5 billion
in 2010 to $11.3 billion this year, and Mayor Don Guardian has said he expects
to lose an additional $2 billion because of the casino closings.
Sweeney also said the Atlantic City Alliance (ACA), the
marketing organization created in 2011 as a result of legislation signed by Christie,
"must be evaluated to determine whether it is fulfilling its original
purpose."
In a statement, Tom Ballance, chairman of the alliance,
said: "During the past three years, [president] Liza Cartmell and the ACA
team have tirelessly and effectively marketed Atlantic City, helping broaden
the destination's appeal. However, we recognize the dire situation that has
evolved since the ACA was founded and understand that we must consider all
options to stabilize Atlantic City."
Sweeney said the total cost of operating Atlantic City's
government, including the school district, is $377 million.
"That is not sustainable," he said, describing
the tax burden on residents as "unbearable."
Property taxes have increased 50 percent in the last two
years, as appeals by casinos have shifted the tax burden to residents.
Also under Sweeney's plan, $25 million to $30 million in
annual revenue from a tax on gaming, which currently goes to the state-run
Casino Reinvestment Development Authority for projects like a new Bass Pro
Shop, would be diverted to pay the city's debt service.
This provision would not apply retroactively to projects
that have received funding, Sweeney said.
The city has issued bonds to cover casino tax appeals,
increasing its debt, Sweeney said.
Sweeney also wants to reduce municipal and school
district costs by $72 million. And his legislation would require casinos to
provide health care and retirement benefits to its employees.
A bankruptcy court judge in Wilmington has allowed Trump
Entertainment Resorts Inc., at the direction of billionaire investor Carl
Icahn, to end employer-sponsored health insurance and stop contributing to a
union pension plan.
The company told the union Monday that if it does not
drop its appeal of the cost-savings package, the casino will be closed.
Source: Philly.com
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