The loss of 8,000 jobs in Atlantic City's casino industry in the last 12 months has sent shock waves through the region's economy, but an even more precipitous collapse is underway in the city's property-tax base.
Eight or nine years ago, casinos owned 85 percent of Atlantic City's real estate, based on assessed values, Mayor Don Guardian said last week. Now, they account for about 55 percent of the assessed values and are expected to keep falling, he said.
A proposal by New Jersey Senate President Stephen Sweeney (D., Gloucester) to stabilize Atlantic City's tax base by allowing the casinos, in aggregate, to pay a flat rate of $150 million this year and next year instead of volatile property taxes gained traction Wednesday when Atlantic City and Atlantic County agreed on how to split that money.
County Executive Dennis Levinson scheduled a meeting Monday to discuss the revenue agreement with Atlantic County mayors, who have had to raise property taxes to make up for declines in casino assessments.
A 2007 revaluation boosted the assessed value of all Atlantic City real estate to $20.5 billion from $8.2 billion, with casinos accounting for the bulk of the increase. But since 2010, appeals by casinos hurt by sagging revenue have gutted the tax rolls, which totaled just $11.3 billion in 2014, according to Atlantic County Board of Taxation records
"We're going to continue to spiral down with assessed values, probably more than $3 billion this year. We're eventually going to get down to $7 billion before we level off," Guardian said of the city's overall assessments.
Casinos' assessments have plummeted since 2010 from about $15 billion to less than $6 billion, based on values won on appeals. For example, New Jersey Tax Court in October 2013 slashed Borgata's 2010 assessment to $870 million from $2.3 billion.
The collapsing value of casinos has forced a massive shift in taxes to residents, who for years benefited from the flow of out-of-staters' gambling losses into the city's coffers.
But they're now feeling the pinch as those tax dollars stay in neighboring states that now have gambling, and they've seen their property taxes increase by more than 50 percent in the last two years.
Guardian said he would bring expenses in check so the rise in rates ends.
"The people that are left, the property owners that are left, cannot pick up any more of this cost," Guardian said.