“The center of the Boardwalk. The heart of the action.” Not anymore. By mid-September, three Atlantic City casinos will close, clearing a whopping $2 billion from the city’s already shrinking tax base, reports Harold Brubaker of Philly.com. Trump Plaza Hotel Casino, owner of the above motto and an 86,000 square foot property with 906 deluxe rooms, recently announced its plans to close in September. Despite its deluxe rooms, the casino still boasted that it had the lowest priced buffet in Atlantic City.
Revel Casino Hotel, which opened in 2012 at a cost of $2.4 billion with more than $260 million in tax reimbursements, also announced Aug. 12 that it would cease operating by Sept. 10. And Caesars Showboat Atlantic City announced June 27 that it would close effective Aug. 31. Atlantic City’s Mayor Don Guardian predicted that the city’s total property value will be as low as $7.5 billion by 2017, compared to $20 billion five years ago, Brubaker notes, a 62 percent drop in less than a decade.
Property taxes are an important source of revenue in all states, but this is especially true in New Jersey. The state ranked first in property tax collections per capita in 2011, at $2,893, which is 12 percent ahead of the next closest state, according to statistics from the Tax Foundation’s 2014 Handbook on Facts & Figures. New Jersey also ranked first in property taxes paid as a percentage of owner-occupied housing value in 2012, at 2.09 percent.
Atlantic City taxpayers should be worried—these numbers are only averages. Removing Atlantic City casinos, some of the most valuable sources of property tax revenue in the state, from the tax rolls will only make the situation worse for the average homeowner. For example, in November 2012, before Revel had been open for even one year, the casino already owed $12 million in back taxes—the same amount as 4,148 homeowners each paying the average $2,893.
Also making the situation worse is the fact that the casino closings mean that the city will cut 300 jobs, eliminating 18 percent of its municipal workforce as the city struggles to stay within its already limited budget, reports Bloomberg News.
Continue the conversation on Bloomberg BNA’s State Tax Group’s LinkedIn page: How will Atlantic City make up for this significant loss of property tax revenue?
Sign up for a free trialof the Bloomberg BNA Premier State Tax Library and see a detailed discussion on state property taxes.
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