Atlantic City Dipping Into the Well Once Again
The City of Atlantic City is apparently dipping into the well of its taxpayers’ wallets once again to fund property tax appeal refunds owing to the city’s casinos. According to an article by Emily Previti in the Atlantic City Press, the City Council is approving the issuance of $103 million in bonds, and is already considering approving another $40 million bond for next year.
This is not the first time that Atlantic City has elected to issue bonds to cover these property tax refunds, which are owing due to successful property tax appeals by the city’s casinos. This spring, the City’s bond rating was downgraded by Standard & Poor’s to A-, and the financial ratings firm warned of further reductions, with a negative outlook due to the uncertainty of future tax assessment reductions for the city’s casinos and the budgetary impact they may have. According to the Press, Atlantic City’s current $234 million budget required a 9% tax increase – which presumably includes the debt service on bonds already issued – and City officials project the need for another $40 million to fund repayments for pending tax appeals.
While the City is still below its overall bond capacity, the prospect of further appeals, a shrinking ratable base and concerns about the City’s ability to overcome the downturn of the casino industry which has accompanied the current economic recession, are all apparently on the minds of the Standard & Poor’s rating analysts.
Notwithstanding these signs of fiscal instability, the City, along with involvement and support from the New Jersey Casino Reinvestment Development Authority, Economic Development Authority and Sports & Exposition Authority, continues to work with private casino industry and other local interests on reviving Atlantic City as a commercial and tourist destination. Local government officials have been trying to find other ways to save money and, in light of these recent events, will need to keep trying.
See our prior blog posts regarding Atlantic City’s struggles with property tax refunds:
- Atlantic City Casino Revenue Continues to Fall- Down 10 Percent for July (paramuspost.com)
- Down on its luck: Revel jobs, revenue falling below projections (nj.com)
- Jimmy Buffett to open Margaritaville casino in Atlantic City in 2013 (nj.com)
- Heads Up: In Atlantic City, Thinking Beyond the Casino (travel.nytimes.com)