Judge to decide the compensation for Atlantic County Casino tax break
July 15, 2022
In the next thirty days, New Jersey Superior Court Judge Michael Blee will decide the amount of compensation as a fine for last year's tax breaks. The compensation is meant to replace lost tax revenue for Atlantic County due to Governor Phil Murphy's signing of the casino tax break.
According to sources, because of Murphy's signature, it is predicted that the state of Nevada must pay millions of dollars as compensation to the county after Blee’s decision later.
Previously, Atlantic County had accused the state of New Jersey of granting tax breaks for casino companies under Murphy's supervision. The county pointed out that the State of New Jersey had broken the 2018 settlement agreement between both parties. Blee’s decision regarding compensation money will determine how this legal dispute will end.
Atlantic County loss
For the record, Murphy had signed amendments in December 2021 and amended the previous tax program in the state. He decided to allow exemptions for casinos from property taxes. In that situation, he also reduced Atlantic County’s tax base by $3.2 billion as a part of New Jersey, so the county lost the tax revenues from casinos.
According to sources, at that time, the supporters of Murphy’s amendments said that the exemption would prevent the closure of four casinos within the county. Also, there will be a chance of another casino opening in Atlantic County.
However, not so long after the decision, Ronald Ricchio, an attorney for Atlantic County, criticized that the decision made by Murphy violated the court order. He said that Atlantic County and the state of New Jersey had agreed to accept the 2018 settlement and the amendments will reduce the payments for the county. He said that he was against the amendments because he think that they would not work for the county.
“This goes right directly to the constitutional separation of powers. It’s the executive and the legislative branch essentially thumbing its nose to the judiciary, and it doesn’t work that way,” he said.
Ricchio said the amended law will cost the county as much as $25 million through 2026, and the tax break would also cost the county $4.7 million this year. Ricchio also stated that the previous payments made in February and May were roughly $2.4 million short of what the county would have received under the old version of the law.
New Jersey’s Attorney statement
John Lloyd, an attorney who represented the state of New Jersey and backed the exemption amendments, said in 2021 that Atlantic County officials did not know about the effect of the amendments.
He stated that the amendments will allow the varying payments because it is based on casino revenue. He said that there will be a different amount of revenue for the county and there are possibilities it will increase over years. He also said to Judge Joseph Marczyk in court that Atlantic County's accusation would not stop the effect of the amended law signed by Murphy.
“It’s literally impossible to do, your honor,” he said. “Absent that ability, all the emotion about flouting this court, coequal branch of government, the citizens and taxpayers of Atlantic County falls apart."
Besides the tax revenues, both the county and the state also sparred over internet gaming revenue before and attorneys for the state have already attempted to move the case into the Appellate Division, but that bid was unsuccessful.