One of the major problems with the payments-in-lieu-of-taxes legislation change thus far was the significant loss of tax income that resulted from it. The money had to come from someplace. It appears that the State’s Constitution may also have some issues.
There is another issue surrounding the PILOT amendment
The Press of Atlantic City exclusively reported on a lawsuit being filed by Liberty and Prosperity, a local nonprofit, trying to cancel the amended payments-in-lieu-of-taxes (PILOT) law that changed how casinos’ taxes were calculated. This is happening at the same time as the State is fighting Atlantic County over the same issue, where Atlantic City casinos claim that PILOT might be life-or-death for them.
According to the author of the Press of Atlantic City’s report, it is Judge Michael Blee who is expected to make the call soon on whether the amendment to the original 2016 PILOT violates a tax uniformity clause in the State’s Constitution.
On the one side we have Liberty and Prosperity arguing that the amendment proposed taxing casinos differently which can be construed as a violation to the uniformity clause in the State’s Constitution. The State argues that there is already a case to be made about casinos being treated differently in constitutional terms because of how casino gaming was first legalized in Atlantic City.
The crux of the problem is that the original deal of the PILOT program was very focused on protecting taxpayers and now casinos are on the verge of being kept afloat by the proposed changes to the original deal.
There is a complex story of property tax break law
The first PILOT was passed in 2016 and was passed into law at the end of last year, but some of the proposed amendments didn’t sit well with all parties involved. There was a case to be made that this lost tax money would ultimately have to come mostly from taxpayers, and that started flooding the issue, despite the fact that casinos would say they required the tax reliefs in order to continue in business.
The waters were muddied by numerous takes on the PILOT amendment, with each side trying to steer the boat in the direction that best suits them. Millions of dollars in lost tax revenue for the County would have to be compensated by the State or the taxpayers, as a result of the amendment, which excluded i gaming and sports betting.
In February of this year, Atlantic County was expecting a decision from the New Jersey Superior Court Judge. This was later pushed back to the end of April. After a second judge ruled against the proposed changes in May, it was getting more and more difficult to gauge what the legal limits for a property tax break could and should be.
As this gets decided, the issue might be coming to a close, so be on the lookout for more updates.
The amended payments-in-lieu-of-taxes law that changed how casinos’ taxes were calculated was the subject of a lawsuit filed by Liberty and Prosperity. The amendment meant millions of dollars in lost tax revenue for Atlantic County, which would have to be compensated by the state or the taxpayers.