ATLANTIC CITY — Local tax bills could rise more than 9 percent to make up for casino property values dropping by nearly $2.3 billion during the past year.
Most property owners will pay the higher taxes because half of the city’s casinos have successfully contested their property assessments.
Officials are working on ways to reduce the burden on noncasino taxpayers under the $232 million proposed budget for 2012, which is down $12 million, or 5 percent, from last year’s $244 million budget, City Council members said Monday.
The proposed tax rate is $1.13 per $100 of assessed value, up 9 cents from the $1.04 rate in 2011.
This year’s proposed budget would be 20 percent more than the 2007 budget of $193 million and up 91 percent from a $121 million budget of 10 years ago.
For the average residential property owner, the new budget means a bill of $2,715 this year, up $225 from $2,490 in 2011, assuming the property’s value did not change.
Average residential property values, however, dropped by nearly 5 percent in Atlantic City since last year, according to numbers provided by the municipal Tax Assessor’s Office.
Driving the tax increase is the loss of $1.4 billion in ratables, 7 percent of the city’s ratable base, down to $18.1 billion. The drop came mainly because of tax appeal settlements, including those that reduced property values for Caesars Entertainment Corp.’s four local properties.
The city’s ratable base could erode even further if remaining casino tax appeals also result in lower assessments. The city has not yet resolved appeals filed by Revel, Trump Plaza Hotel and Casino, Trump Taj Mahal Casino Resort, Borgata Hotel Casino & Spa, Tropicana Casino and Resort, Atlantic Club Casino Hotel and Golden Nugget Atlantic City, formerly Trump Marina.
“This doesn’t look good at all, and next year looks just as bad, so it’s not a good situation,” 6th Ward Councilman Tim Mancuso said. “We’re down almost $2 billion. How do you make that up?”
The proposed budget does not call for layoffs and limits department spending increases mainly to contractual obligations, city Revenue and Finance Director Michael Stinson said.
The largest is an increase of $1.8 million for police, attributable to 4 percent contracted raises and the $500,000 cost of hiring 25 Class II officers, for a total budget of $38.9 million, the proposed budget shows.
Extra money for legal costs to fight casino tax appeals is included in the budget, Stinson said. Those expenses more than doubled from $385,000 in 2009 to $785,000 in 2011, city legal bills and contracts show.
“It’s not like we’re spending crazy amounts of money on frivolous things. We’re bare-bones as it is,” Councilman Mo Delgado said. “We’ve made requests through the Governor’s Office, and with the CRDA (Casino Reinvestment Development Authority) directly about … paying taxes on their properties.”
The CRDA has historically been forgiven all or part of taxes on its resort properties.
CRDA spokeswoman Kim Butler said Monday that the agency is open to the possibility of starting or increasing existing partial property-tax payments, or other mechanisms, to help support police, fire, trash retrieval and other public services on which casinos and the rest of the Tourism District depend.
Mayor Lorenzo Langford, who did not respond to calls or emails seeking comment, previously suggested the CRDA facilitate a surcharge of some kind on casinos or other businesses to help pay for public safety services in the Tourism District.
Mancuso and other councilmen have lobbied state officials to change New Jersey’s tax laws to negate what they consider an unfair advantage afforded casinos by current regulations.
“They have to offset some services we put out — those are big issues, big tickets for us, especially public safety — not necessarily a surcharge, but through strengthening our ability to defend our assessments,” Mancuso said.
Existing rules let businesses choose how their property values are calculated, basically deciding whether to factor in financial performance or not, he said.
That scenario has forced costly court battles and compromised the ability to plan long-term for both the city government and local casino industry, Stinson said.
“We want to come up with a better method,” Stinson said. “Right now, we have these fluctuations from year to year. We can’t have that, it doesn’t work, and we’re proving that pretty easily right now.”
City officials have worked with the state Treasury Department and Local Finance Board in the Department of Community Affairs to put together the preliminary research needed for tax-assessment legislation, Atlantic City Business Administrator Michael Scott said.
They also have discussed other methods for addressing the issue in the meantime, including doing another citywide revaluation, Stinson said.
“Now is not the right time to do it,” Stinson said. “If we do a complete reval, more of a burden will be shifted to the residents because the casinos are still appealing.”
Atlantic City underwent a revaluation in 2008, and municipalities normally wait longer before doing another, Stinson said.
Still, state Sen. Jim Whelan, D-Atlantic, said another one may be necessary.
“The last one was done just a few years ago at the top of the market,” said Whelan, a former city mayor who lives in the resort. “Casinos are in a position where they’re appealing and doing assessments. A lot of individual homeowners might not have the resources or the awareness to appeal their property taxes. While it seems some shift from casinos to the rest of us is inevitable, one way of getting that down would be to do a citywide reval. Beyond that, I don’t know … there’s any extra money lying around anywhere to offset what we’re looking at.”
Most property owners will pay the higher taxes because half of the city’s casinos have successfully contested their property assessments.
Officials are working on ways to reduce the burden on noncasino taxpayers under the $232 million proposed budget for 2012, which is down $12 million, or 5 percent, from last year’s $244 million budget, City Council members said Monday.
The proposed tax rate is $1.13 per $100 of assessed value, up 9 cents from the $1.04 rate in 2011.
This year’s proposed budget would be 20 percent more than the 2007 budget of $193 million and up 91 percent from a $121 million budget of 10 years ago.
For the average residential property owner, the new budget means a bill of $2,715 this year, up $225 from $2,490 in 2011, assuming the property’s value did not change.
Average residential property values, however, dropped by nearly 5 percent in Atlantic City since last year, according to numbers provided by the municipal Tax Assessor’s Office.
Driving the tax increase is the loss of $1.4 billion in ratables, 7 percent of the city’s ratable base, down to $18.1 billion. The drop came mainly because of tax appeal settlements, including those that reduced property values for Caesars Entertainment Corp.’s four local properties.
The city’s ratable base could erode even further if remaining casino tax appeals also result in lower assessments. The city has not yet resolved appeals filed by Revel, Trump Plaza Hotel and Casino, Trump Taj Mahal Casino Resort, Borgata Hotel Casino & Spa, Tropicana Casino and Resort, Atlantic Club Casino Hotel and Golden Nugget Atlantic City, formerly Trump Marina.
“This doesn’t look good at all, and next year looks just as bad, so it’s not a good situation,” 6th Ward Councilman Tim Mancuso said. “We’re down almost $2 billion. How do you make that up?”
The proposed budget does not call for layoffs and limits department spending increases mainly to contractual obligations, city Revenue and Finance Director Michael Stinson said.
The largest is an increase of $1.8 million for police, attributable to 4 percent contracted raises and the $500,000 cost of hiring 25 Class II officers, for a total budget of $38.9 million, the proposed budget shows.
Extra money for legal costs to fight casino tax appeals is included in the budget, Stinson said. Those expenses more than doubled from $385,000 in 2009 to $785,000 in 2011, city legal bills and contracts show.
“It’s not like we’re spending crazy amounts of money on frivolous things. We’re bare-bones as it is,” Councilman Mo Delgado said. “We’ve made requests through the Governor’s Office, and with the CRDA (Casino Reinvestment Development Authority) directly about … paying taxes on their properties.”
The CRDA has historically been forgiven all or part of taxes on its resort properties.
CRDA spokeswoman Kim Butler said Monday that the agency is open to the possibility of starting or increasing existing partial property-tax payments, or other mechanisms, to help support police, fire, trash retrieval and other public services on which casinos and the rest of the Tourism District depend.
Mayor Lorenzo Langford, who did not respond to calls or emails seeking comment, previously suggested the CRDA facilitate a surcharge of some kind on casinos or other businesses to help pay for public safety services in the Tourism District.
Mancuso and other councilmen have lobbied state officials to change New Jersey’s tax laws to negate what they consider an unfair advantage afforded casinos by current regulations.
“They have to offset some services we put out — those are big issues, big tickets for us, especially public safety — not necessarily a surcharge, but through strengthening our ability to defend our assessments,” Mancuso said.
Existing rules let businesses choose how their property values are calculated, basically deciding whether to factor in financial performance or not, he said.
That scenario has forced costly court battles and compromised the ability to plan long-term for both the city government and local casino industry, Stinson said.
“We want to come up with a better method,” Stinson said. “Right now, we have these fluctuations from year to year. We can’t have that, it doesn’t work, and we’re proving that pretty easily right now.”
City officials have worked with the state Treasury Department and Local Finance Board in the Department of Community Affairs to put together the preliminary research needed for tax-assessment legislation, Atlantic City Business Administrator Michael Scott said.
They also have discussed other methods for addressing the issue in the meantime, including doing another citywide revaluation, Stinson said.
“Now is not the right time to do it,” Stinson said. “If we do a complete reval, more of a burden will be shifted to the residents because the casinos are still appealing.”
Atlantic City underwent a revaluation in 2008, and municipalities normally wait longer before doing another, Stinson said.
Still, state Sen. Jim Whelan, D-Atlantic, said another one may be necessary.
“The last one was done just a few years ago at the top of the market,” said Whelan, a former city mayor who lives in the resort. “Casinos are in a position where they’re appealing and doing assessments. A lot of individual homeowners might not have the resources or the awareness to appeal their property taxes. While it seems some shift from casinos to the rest of us is inevitable, one way of getting that down would be to do a citywide reval. Beyond that, I don’t know … there’s any extra money lying around anywhere to offset what we’re looking at.”
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