Something is better than nothing. Atlantic City taxpayers should remember these words when judging the little reduction announced recently in the municipal portion of their property tax for the coming fiscal year.
In September, government officials and Atlantic City taxpayers were shocked by a surprise 13% increase in the overall property tax there.
The culprit turned out to be not the city, school or county budgets (which all were stable) but ineffective accounting. The city for years had overassessed its casinos and extracted excess property tax from them — until they went to court and won massive rebates of those ill-gotten taxes. That required Atlantic County for years to refund its share of that excess … until the current budget year, when the refunded money it was sending back through Atlantic City plummeted from $7 million to $300,000. Officials of the state or the city whose finances it controls could have better anticipated this inevitable drop in revenue requiring a sharp increase in property taxes.
Outrage was expressed, of course, and a state/city tax task force was formed to pursue some sort of relief for Atlantic City taxpayers. The owner of an average $150,000 home there is paying an extra $677 this year, bringing their property tax to $5,850.
The task force met, pledges to consider every option were made, and the state even suggested that an unspecified policy proposal might assist taxpayers with their bills in some way. But as is often the case with task forces, nothing came of it, and it was forgotten.
At the start of this month, though, the state Department of Community Affairs, Mayor Marty Small Sr. and Council President George Tibbitt announced the city would cut its share of the local property tax — less than half the total — by about 5%. Tibbitt said they all worked hard together for the tax reduction.
It was possible because the success of the city’s casino industry (prepandemic) will increase its payments to the city by $20 million, and because local revenue collections have exceeded expectations.
The tax reduction is certainly welcome and continues the prudent municipal budgeting under the state’s oversight since 2016. Not only is this the fourth straight year of no municipal tax increase, in 2017 the state managed to cut the tax rate 11.4%.
This is a particularly good year to be prudent on taxes and spending, with the pandemic making future finances uncertain. Other area towns — including Galloway Township, Brigantine and Northfield — have managed to reduce municipal taxes as well.
But Atlantic City is a special case, with $566 million in debt. The mayor said that at its current rate of repayment, the city would take until 2043 to pay that off.
An indebted household that got extra money probably would pay off its debt faster. Perhaps the state is counting on Atlantic City’s reinvention to increase business and revenues, making debt reduction easier.
Meanwhile, the city counts on substantial state aid — $62 million last year. Mayor Small said he’s sure that will continue, despite the state’s own financial struggles now much worsened by the pandemic.
New Jersey’s takeover of Atlantic City joined their fates for better or worse, for richer or poorer.
Let’s all hope state leaders understand their responsibilities and can carry them out.