A bill to lower what Atlantic City casinos would have to pay in lieu of property taxes for five years will be voted on by both the full Assembly and state Senate Monday.
A5587 was amended and passed by the Assembly Appropriations Committee this past Monday to match the Senate version of the bill (S4007). The Senate version passed that house’s budget committee the Monday before.
Both decrease the basic PILOT payment for all nine casino properties to $110 million in 2022, from about $165 million they likely would have had to pay had the original PILOT bill continued.
The Office of Legislative Services fiscal estimate estimated the new law would save casinos $30 million to $50 million a year for the remaining years.
Among the important changes made to the Assembly version was a lower basic PILOT payment and a requirement that the casinos together pay an additional $5 million per year from 2024 to 2026. The original Assembly version, introduced by Assemblyman John Armato, D-Atlantic, in May, set the basic PILOT at $125 million and required each casino to pay an additional $5 million annually.
If passed by both houses, the bill would go to Gov. Phil Murphy for his signature and must be signed by Jan. 11, when the new 2022 to 2024 Legislative session begins.
The Assembly meets at 1 p.m. Monday and the Senate at 2 p.m. Monday.
Several lawmakers who voted to pass the bills out of the Senate and Assembly budget and appropriations committees, however, reserved the right to change their vote at the full floor vote.
One was Sen. Troy Singleton, D-Burlington.
“The disappointment in simplest terms, there are significant issues here, and no one (from the casino industry) thought it was important enough to be here,” Singleton said before his vote Dec. 6. “I don’t like how this came about ... but I will vote yes with grave reservations.”
After the Senate committee hearing, Joe Lupo, president of the Casino Association of New Jersey, said the association had submitted a position paper on S4007 and had been available virtually to answer questions of the lawmakers. But that availability was apparently unknown to the committee.
Again after the Assembly committee hearing, in which no one from Casino Association spoke, Lupo said a representative had been in the audience.
Singleton said he voted yes to protect jobs.
For both sides of the aisle, state Senate President Steve Sweeney’s warning that four of the city’s nine casinos would likely close without passage of the new PILOT seemed to trump all other concerns.
“We made mistakes (in the original PILOT bill), and if we don’t fix them we run the risk of closing four casinos,” said Sweeney, who sponsored the bill.
However, Sweeney provided no proof that any casino would be in danger of closing without the bill.
State Sen. Michael Testa, R-Cape May, Cumberland, Atlantic, abstained in committee but said he wants more information before he votes on the floor.
“I’m very concerned about any casino closures. I agree with the Senate president that, as Atlantic City goes, that’s how South Jersey goes,” Testa said. “But I would like to ask people who have skin in the game different questions so we can properly assess what is going on in Atlantic City.”
Testa said such an important piece of legislation should not be rushed through in lame duck session.
“My understanding is, the way revenues have gone, the state of New Jersey grossly underestimated its revenues,” Testa said of the Murphy administration underestimating New Jersey’s 2021 revenues by billions. “So I really want to know, not just for those four casinos, but the industry as a whole how they are doing. How is it trending?
“If they are going to be asking for changes in a deal they made, they have got to be transparent,” Testa said.
The industry has reported greatly increased revenues overall this year.
Casinos also pay 1.5% of brick-and-mortar gaming revenues and 2.5% of internet gaming revenues in investment alternative taxes, which are used for a variety of projects in Atlantic City under both the original and amended bills.
Atlantic County Executive Dennis Levinson has said he will sue the state again if the bills pass and are signed by Gov. Phil Murphy. The legislation specifies the county will get $17.5 million in 2022, which is what it received in 2021. But had the original PILOT stayed in effect, the county’s share would have been about $20.8 million, according to OLS.
PILOT payments were depressed in 2021 by the effects of the COVID-19 pandemic. Payments are based on the previous year’s casino revenues, so this year’s payment was based on 2020 revenues, when casinos were hit hard by closures and COVID restrictions.
Sources in the administration have said the amendments are being pushed by the governor, so he is likely to sign it.