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Prospect of new Atlantic City tax receipts has officials feuding; Christie decision pending

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TRENTON, New Jersey — Gov. Chris Christie has not decided whether to sign legislation to help economically struggling Atlantic City, yet local officials have already begun arguing over potential tax proceeds contained in the measure.

The bill in question is one of five passed in June by the Democrat-led Legislature. The measure lets Atlantic City's eight casinos make payments in lieu of taxes for 15 years, allowing the gambling halls to know exactly how much they owe instead of facing huge potential increases.

The legislation comes at a time of upheaval in New Jersey's gambling market, and as Christie seeks the Republican nomination for the White House.

Four of Atlantic City's 12 casinos shut down last year, and state officials are debating whether to let voters decide whether to expand casino gambling to other parts of the state.

The disagreement centers on how much tax revenue from the payment-in-lieu-of-taxes plan should be divided between Atlantic City and other governments in Atlantic County.

From the view of some municipal officials in the county the legislation does not specify how the funds should be split up, and that apparent ambiguity has resulted in sharp disagreements between one camp that wants to see Christie sign the legislation and another that wants him to conditionally veto the measure.

The clash dates to a January agreement between Atlantic County municipalities and Atlantic City Mayor Don Guardian, who is a Republican, in which the sides acknowledged that the county would receive 13.5 percent of the tax payment received by the city through the PILOT program. That's higher than the nearly 11 percent the county received in the last tax year.

The payment-in-lieu-of-taxes measure would let the casinos collectively pay $150 million for the first two years and $120 million annually for 13 years, assuming gambling revenue stays within certain ranges in the city.

Guardian says he made the deal before the final bill was passed and expected the city to be getting more revenue than was written into the measure that passed.

The dispute spilled into the public forum when the Atlantic County Mayors Association publicized a letter and resolution last month asking Christie to conditionally veto the PILOT program and instead specify the 13.5 percent payment to the county.

Galloway Township Mayor Don Purdy, a Republican, supports the 13.5 percent threshold and says his municipality would see a modest increase in tax revenue of about $20,000, compared with a tax burden of up to $2 million more under the current scenario. He estimated local taxes might have to increase if the lower percentage prevails.

Purdy said Guardian is doing a good job in Atlantic City and wants to see a PILOT plan move forward, but has reservations.

"The most important thing is mayors are supportive of the PILOT," he said. "Just not in its current form."

Democratic state Sen. Jim Whelan takes issue with the mayor's association's desire for a higher percentage. Whelan said the principal reason for the plan was the collapse of the casinos' property, and with them, the city's tax revenue, which also affects the county's receipts.

"Everybody wants to do this without any pain," Whelan said. "There's pain here."

Senate President Steve Sweeney, who authored the legislation, said it's frustrating to see the disagreements.

"They're all trying to position themselves to blame someone else," Sweeney said. "I do understand the mayors wanting to take a position ... but how do you expect Atlantic City to pay more than their share going forward when they're the most financially challenged?"

Whelan disputed the association's point that the legislation is vague about how the tax money would be distributed. He pointed to a section of the legislation that indicates the current rate would apply.

The Casino Association of New Jersey, which represents the gambling industry in Atlantic City, took aim in a recent statement at both the city and the county.

"We cannot afford to waste any more time. The economic stability of the city, region and state depend on it. Therefore, we urge all officials (city, county and state) to do what is necessary to work with the administration to implement the economic revitalization legislation," the association said in a statement.

Guardian said the city has taken cost-cutting measures already, trimming the city's budget by $40 million.

"We're living every week with whatever changes happen. This is nothing new for us," he said. "But we'd like some stability right now."

Christie's office declined to answer questions about the bill and typically does not comment on measures before the governor acts on them.

The other measures on Christie's desk would create new state education aid just for Atlantic City (without saying how much); mandate health insurance and retirement benefits for casino workers (without mandating specific amounts of coverage); divert alternative investment taxes the casinos now pay for redevelopment projects to help pay down Atlantic City's debt; and eliminate the Atlantic City Alliance and use its $30 million annual budget for other, as-yet undetermined ways to help the city

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