Shutterstock/Mia2you There’s some legislative drama unfolding in New Jersey, and if you’re not clear on what it’s all about, you’re not the only one.
The casino industry is a pillar of the Atlantic City economy, employing tens of thousands of workers – almost as many people as actually live in the city. However, as many as four of the city’s nine casinos could be on the verge of closure. So warns Sen. Stephen Sweeney, D-Gloucester.
At the heart of the issue are the unexpected consequences of 2016’s Casino Property Tax Stabilization Act (CPTSA). Sweeney has been fighting to amend the law to correct for those earlier oversights.
However, Sweeney and Assemblyman John Armato , D-Atlantic, who sponsored a similar bill in the other half of the legislature, were both defeated in the November general election. As a result, the fate of those bills , and by extension the Atlantic City casino industry, is up in the air.
It doesn’t help that the problem hinges on an arcane bit of financial arithmetic. Much of the discussion about the proposed modifications has therefore consisted of misleading or disingenuous hand-waving.
Online Poker Report spoke to one of our colleagues at PlayNJ , a local gambling news site in the same network. David Danzis , the lead writer for PlayNJ , has been following CPTSA and the proposed amendments closely. With his help, we’ll try to simplify this complex topic as much as possible for our readers. What is a PILOT bill?
The CPTSA enacted a version of what’s called PILOT – Payments In Lieu Of Taxes – for the Atlantic City casino owners. To understand what’s going on now, we first need to understand what these programs are, and the purpose they serve.
As the name suggests, a PILOT is a piece of legislation that exempts an entity from standard taxation, in exchange for payments determined by some alternative scheme. More specifically, New Jersey uses them as an alternative to property taxes in certain cases.
The particular calculations vary from case to case. Generally speaking, however, they’ll be both lower and more predictable than conventional taxes. The municipality […]
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