The state General Assembly voted Thursday afternoon in favor of providing temporary financial relief for an Atlantic City casino industry struggling under the weight of the coronavirus pandemic.
The Assembly passed S2400/A4032 by a vote of 71 to 5, with three abstentions.
The state Senate passed a different version in June and must now consider the recently amended bill.
As originally introduced, the emergency relief bills would have provided both permanent and temporary tax breaks for the casinos. The length and scope of the industry relief has been scaled back with amendments.
In explaining the need to help out a multi-billion industry, lawmakers cited a “catastrophic and unprecedented economic contraction,” to Atlantic City and the surrounding area as a result of the 107-day shutdown of the casinos. The shutdown resulted in more than $112 million in operating losses for the gambling parlors and a nearly 50% reduction of the industry’s workforce.
“The COVID-19 pandemic and consequent business closures has clearly not just reversed the consistent track of economic improvement that the Atlantic City casino industry had worked very hard to achieve over the last several years, but also has set back the economy of an entire region that is greatly dependent on the jobs, tourism spending and purchases that the Atlantic City casinos generate,” reads the text of the amended legislation.
The proposed legislation allows for a reduction in taxes paid on gross gaming revenue and a monthly deduction against gross gaming revenue equal to the amount of promotional gaming credits (free and/or match play) used by customers. Both provisions are applicable for one year from the date the casinos were permitted to reopen, which was July 2.
The bill also requires the casinos to make a “good faith effort,” to hire as many former and new employees to align with any increase in business.
State Sen. Chris Brown, R-Atlantic, was a primary sponsor of the upper chamber version, along with Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, and said the bill was a bipartisan effort toward getting people back to work “as quickly as possible in a responsible manner.”
“Remember, our goal is to get employment back up to pre-pandemic levels when over 27,000 local families held casino jobs,” Brown said. “We have to take these initial steps and develop a plan, not a bailout, to help our local economy recover as quickly as possible.”
The legislation was amended in committee to remove tax breaks on hotel and parking fees and also to eliminate a provision which would have required the Casino Reinvestment Development Authority to pay for city marketing.
Throughout committee hearings on the legislation, lawmakers and advocates expressed concern that the tax breaks would result in a reduction of senior and disabled services since those programs rely heavily on funding from the Casino Revenue Fund, which is funded through casino-related taxes and fees.
The bill was amended to ensure that rural transportation services for seniors and the disabled are funded to pre-pandemic levels.
Assemblymen Vince Mazzeo and John Armato, both D-Atlantic, had initial reservations about the bill when it was introduced, but signed on as co-sponsors after the legislation was amended to remove permanent tax breaks for the casinos.
“This bill has been a work in progress,” Mazzeo said. “We all know that the casino industry is vital to the success of the local finances and to the over 30,000 individuals it employs. However, as we have said from the beginning, that success cannot come at the cost of the Atlantic County taxpayer or the hard working families who rely on the services provided by the casino revenues.”
Armato said the “concessions made on this bill were imperative.”
“We are glad that leadership took our concerns seriously,” he said. “Atlantic City will be feeling the down turn in the economy like the rest of the state and country. Ensuring that we do not intentionally worsen that or place any extra burden on the tax payers is our top priority.”
Armato said he and Mazzeo remain opposed to companion legislation that was introduced for the casinos which would permit the state treasury to provide interest-free loans to the gambling parlors at the expense of the senior freeze and homestead rebate fund, calling it a line they were not “willing to cross.”