Atlantic City PILOT Program under Fire from Advocacy Group

Atlantic CityA program exempting casinos from property taxes in Atlantic City is under fire by an advocacy group that has challenged the program in court.

In Atlantic City, there are only seven casinos currently in operation. Over the years, casino gaming venues have shut down and the gaming city has struggled financially. So much so, that the state considered taking over the finances of the city in order to be able to place money in the right place to see the city come back from potential ruin. To help with the financial struggles, a PILOT program was created. This program allowed the casinos of the city to pay an annual payment of $120 million collectively instead of paying property taxes.

The PILOT law was introduced by lawmakers in order to generate revenues for the city from the casino gaming venues. The tax break was set to help the venues stay in operation instead of seeing even more casinos shut down. Further losses of gaming venues would only mean even more damage to Atlantic City. Now it seems an advocacy group is trying to see the PILOT program done away with by way of a legal challenge. The state Superior Court is set to rule on the matter in July.

Liberty and Prosperity

An advocacy group that takes their name from the state motto, Liberty and Prosperity, has decided to contest the law. They argue that the law is in violation of the constitution of the state. The group has pointed out that the state constitution says that a tax exemption can only be introduced with laws that apply throughout the state.

Those opposed to the exemption program have stated that the tax breaks set for the casinos have hurt the businesses as well as taxpayers located in the county. An attorney and the Executive Director of the group, Seth Grossman, spoke to the media recently and stated that the constitution of the state allows for certain tax exemptions to be able to stimulate investment and development. According to Grossman, the program expands on such encouragements but to an absurd extent.

The attorney stated that the corporations behind the casinos of Atlantic City as the properties should not be given such tax privileges, especially on such a large scale. The group is trying to convince the court that the gambling venues will be able to remain intact if tax increases are made within the program while homeowners and smaller businesses of the area will face a heavier burden.

Why Create the Law?

The law offering the tax break for gaming venues was created due to the growing concern of Atlantic City’s future and the casino industry after four casinos closed in 2014 and the Trump Taj Mahal closed last year. However, there are efforts to revive the industry and the Taj was purchased by the Hard Rock International group with plans to reopen next year.

Atlantic City is showing signs of recovery, especially within the last year. However, it will be difficult for the gambling city to be able to regain their former title as a top operating gambling town, especially considering that the neighboring states are expanding their gambling offerings. The revival of the former Taj Mahal into a new Hard Rock venue is sure to help and hopefully more investments will be made in the region.

For now, the tax issue will head to court in July and a decision made on the matter. It will be interesting to see what will come of this debate and if any changes will be made in regards to gambling tax for the casinos of the state.