Atlantic City, New Jersey city officials say the city could be facing bankruptcy after the New Jersey Tax Court ruled in favor of Borgata Hotel Casino & Spa’s (the city’s largest employer and taxpayer) $48.8 million tax reduction last week. The city’s potential refund to Borgata represents 20 percent of the city’s annual revenue. According to Philly.com, though city officials say they plan to appeal to the Appellate Division of Superior Court, they fear the tax court ruling will instigate a new round of tax appeals by casinos, hoping for similar results. Atlantic City’s substantial decline in gaming revenue since 2006 has already triggered a wave of successful tax-assessment appeals by several casinos between 2009 and 2012. At least two – Atlantic Club and Golden Nugget – said last week they planned to seek new assessments to lower their tax liability even more.
Borgata’s Senior Vice President of Operations Joe Lupo told Philly.com, that city officials and taxpayers needs to reevaluate the city’s spending and efficiency, stating that since 2006, the city’s and school board’s spending combined had gone up 34 percent, while property taxes have gone up 84 percent. However, city officials stand by their opinion that the ruling was incorrect, and ”a uniform methodology to assess casino properties in an equitable manner” should be put in place. But the growing concern is the likely possibility of a correlation between the declining casino property values and the fact that Atlantic City’s gaming revenue has experience an erosion of $2.3 billion since 2006, of which a recovery doesn’t look promising.
For the full article from Philly.com, click here.
For Paradigm’s previous story on Atlantic City, click here.