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Atlantic City passes 2020 budget with property tax decrease

Atlantic City passes 2020 budget with property tax decrease

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City Hall

City Hall in Atlantic City.

ATLANTIC CITY — City Council adopted the 2020 municipal budget Wednesday night, delivering a slight tax reduction to property owners for the second time in five years.

City government and the state Department of Community Affairs crafted a $210.7 million budget that is $1.3 million higher than last year’s, but managed to decrease the municipal property tax rate because of an increase in general revenue and payments in lieu of taxes from the casinos.

The approved 2020 tax rate of $1.70 means that for every $100,000 in assessed property value, the municipal portion of a taxpayer’s bill would equal $1,702.72.

“The 2020 city budget demonstrates that the city continues to make strides in improving its operating efficiencies, reserves and liquidity,” Lisa Ryan, a DCA spokesperson, said Wednesday night. “It also shows that the city has made real progress in adjusting its staffing levels and prioritizing how money should be allocated. Every year, the city is getting better at living within its means.”

The anticipated amount to be collected from non-casino property taxes is decreasing by nearly $3.3 million this year compared to 2019.

More than $66 million in state aid is anticipated for the 2020 budget. In 2019, Atlantic City received $64.3 million in state aid.

DCA Deputy Commissioner Robert Long said that while “things are uncertain” due to the economic impact of the coronavirus on government tax and fee collections at all levels, the state aid anticipated in the city’s 2020 budget is “set.”

“We have every expectation that those monies will be provided to the city,” Long said Wednesday night.

The casino industry’s strong performance in 2019 — the nine properties reported more than $3.2 billion in total gaming revenue — led to an increase in the city’s portion of state-mandated payments in lieu of taxes. This year’s budget included an increase of nearly $17.1 million in casino PILOT revenue to Atlantic City over last year. That increase was marginally offset by a loss of $13.8 million from investment alternative taxes because of a crediting mechanism built into the casino PILOT law.

The city will collect $2.4 million in additional taxes and fees from a variety of sources in 2020.

Fluctuating revenue collections as a result of the coronavirus may affect the 2021 budget, city officials said.

At a news conference in June, Mayor Marty Small Sr. said the administration is projecting municipal tax decreases for the next three years.

Atlantic City remains under state fiscal oversight following the Municipal Recovery and Stabilization Act of 2016, and the budget must be approved by the DCA.

This year’s budget features the second municipal tax decrease in the past five years, the other being in 2017. In 2016, 2018 and 2019, the city adopted budgets that kept the tax rate at the same level as the previous year.

Property owners were caught off guard last summer when they received first quarter bills with a significant tax increase, even after the city, county and school board adopted budgets with minimal changes. The cause for the increase was twofold: The city received nearly $6.7 million less in tax credits from the county, and the city’s overall tax base shrank.

A recently completed citywide property revaluation did little to change the overall value of the city’s tax base — without the casino properties, the city’s ratables are roughly $2.5 billion — but shifted the burden among non-casino taxpayers, meaning some are paying more in taxes while others are paying the same or less.

Sixth Ward Councilman Jesse Kurtz has proposed a resolution that the state implement a five-year phase-in for property owners to pay tax increases as a result of the reassessment.

Contact: 609-272-7222

ddanzis@pressofac.com

Twitter @ACPressDanzis

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Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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