Atlantic City Advocacy Group Sues State Over Casino Tax Program

An advocacy group in Atlantic City is suing the state over the Payment in Lieu of Taxes (PILOT) program for casinos. It allows casino operators to pay a flat fee of $120 million annually to the local government instead of paying the state’s fluctuating property taxes.

The case is headed to the Atlantic County Superior Court this summer. The nonprofit advocacy group Liberty and Prosperity say the PILOT arrangement violates the New Jersey Constitution, which specifically prevents such tax breaks for casinos “at the expense of all other county taxpayers.”

The PILOT program was introduced in 2014, a time when the Atlantic City casino industry was approaching collapse and a number of casinos were closing their doors. The program, like most tax abatements, was intended to assist blighted properties and encourage redevelopment. But the program was challenged by residents and casino operators the following year after it was introduced.

Opponents of the program argue that the tax break is now going to benefit the richest corporations and most luxurious properties in the city. Many are calling for the repeal or overhaul of PILOT in New Jersey.

Oral arguments in the case of Liberty and Prosperity v. the State of New Jersey are scheduled to begin July 17. Liberty and Prosperity is expected to argue that while taxes are increasing elsewhere in Atlantic County, Atlantic City residents will receive a substantial decrease this year – an average of $418 per homeowner.

The say the PILOT program is to blame for the tax inequality among the county’s 21 municipalities.

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