New Jersey Superior Court Judge Michael Blee has ordered the state to make an immediate payment of $2.36 million to Atlantic County, and more substantial future payments, in a decision in the county’s lawsuit over changes to the casino payment-in-lieu-of-taxes legislation.
But the state on Monday filed paperwork asking Blee for a stay pending Appellate Court review, which would prevent the state from having to make the $2.36 million payment this week and two payments of about $5.6 million on Aug. 15 and Nov. 15.
“The court’s requirement that the state make a multi-million dollar payment in such a short timeframe is burdensome, and the court’s quarterly payment calculation (even assuming that the court’s underlying conclusions on the merits of the county’s claims were correct) overstates the state’s obligation by $4,437,500,” attorneys for the state argued in a brief supporting the stay request.
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Attorney John Lloyd of Chiesa Shahinian & Giantomasi also argued the state had the right to change the PILOT law, and that it stood a good chance of winning on appeal, so the stay should be granted.
The state must make the first payment by Aug. 5, according to Blee’s order issued Friday, to cover the shortfall in payments made to the county so far this year, according to a statement from county spokesperson Linda Gilmore.
If the payments are ultimately upheld, the county would receive more than $22 million in PILOT payments this year, according to Gilmore.
ATLANTIC CITY — Attorneys for Atlantic County told a Superior Court judge on Wednesday the c…
“The state disagrees with the trial court’s decision and filed a motion for leave to appeal the decision on June 7,” said Gov. Phil Murphy’s Press Secretary Alyana Alfaro Post in an email response to questions.
Superior Court Judge Joseph Marczyk previously ruled that the state had violated the terms of a 2018 consent order when it changed the rules of how casinos would make PILOT payments. The new legislation removed internet and internet sports gaming revenues from what the state considered gross gaming revenues, and the county estimated that change would cost it about $5 million a year.
Additionally, Blee’s Friday order requires the State to make quarterly payments through 2026 under the terms of the consent order, which includes internet and sports betting revenues.
The county is also to receive attorney fees and other costs to be determined in further proceedings.
“This is a big win for the taxpayers of Atlantic County,” county Executive Dennis Levinson said in a statement. “Our fight was to protect their best interests and hold the State accountable for its court-ordered agreement.”
Levinson said the county advised Gov. Phil Murphy the amended PILOT legislation would breach the terms of the consent order, but Murphy ignored repeated attempts to communicate.
In 2016, Atlantic City’s local government was broke. It could not pay its employees or fund …
“The governor quickly signed the bill four days before Christmas 2021 during a lame duck legislative session,” Levinson said. “To add further insult to injury, after our suit was filed, the State refused to mediate despite being strongly recommended to do so by the courts.”
Levinson said it was disappointing the state has responded to the order with more delaying tactics.
“The longer this continues, the more money ends up in the pockets of the attorneys. Even when we win, the taxpayers lose,” Levinson said.
County officials sued the state in December after a bill that amended the PILOT program to define casino gaming revenue as only coming from brick-and-mortar gambling became law. The new law cut the county’s share of revenue by as much as $26 million over the next five years, according to county estimates.
The county had sued the state over the original PILOT legislation, and in 2018 the two parties settled that case. It awarded the county about 13% per year of the total PILOT paid by casinos, based on all casino revenues — brick and mortar, internet and sports betting.
Since 2017, casinos have made PILOT payments instead of paying property taxes as a way of stabilizing finances for Atlantic City. The casinos had successfully sued the city to lower their property tax assessments, sending city finances spiraling into possible bankruptcy in 2016.
REPORTER: Michelle Brunetti Post