Summary
- Judge Michael Blee struck down amendments for PILOT causing casinos to now pay higher taxes.
- A stay has been filed and oral arguments for the request will take place on October 7.
- The judge ruled that the approved amendments were in violation of the state constitution.
New Jersey is not happy with the recent ruling by Atlantic County Superior Court Judge Michael Blee regarding the PILOT program. The judge decided on August 29 to rule in favor of the nonprofit Liberty and Prosperity to state that the amendments made to the PILOT program in 2021 were in violation of the state constitution, as they favored an industry over the public.
PILOT allowed casinos in the state to make a small payment rather than the higher tax payments they have paid for years. Changes were made due the effect of the COVID-19 pandemic. After the ruling, the state has now decided to file a stay and hope that the decision will not be permanent.
Millions in Tax Breaks
The amendments in 2021 changes the 2016 PILOT law to allow casinos in Atlantic City to receive millions in tax breaks. The casinos were allowed to remove online gaming revenues from their totals when calculating earnings.
The recent stay was filed by State Attorney General Matt Platkin and it argues that Atlantic City finances along with the state will be thrown into disarray with the ruling. The benefits of the amendments will be lost unless the order is put on hold until an appeal can be made by the state.
The state says that without the stay, ‘irreparable harm’ will be seen. The state also says that the amendments are not in violation of the New Jersey constitution. They serve the public purpose by stabilizing the casino industry in Atlantic City.
Liberty and Prosperity Responds
In response to the brief that was filed, Liberty and Prosperity have filed a response. Seth Grossman, the Liberty and Prosperity President, said that the state has not provided a credible fact or expert opinion with evidence that shows laws that reduce taxes for an industry and raising taxes on other properties will increase the overall economy in the region.
Grossman further stated that the state has not provided any evidence that the industry suffered more than other industries during the pandemic. The group is sticking by their main driving point that the New Jersey constitution prohibits Legislature from taxing one group in real estate differently than another that are located in the same jurisdiction.
Resorts, Golden Nugget and Bally’s will most likely face higher payments than before when the PILOT plan was first introduced. Such a change could result in the need for closure.
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