presented: February 2, 2016
I am pleased to present the 2016 Atlantic County Executive Budget. Although the times remain challenging, circumstances have changed somewhat for the better since I appeared before you a few weeks ago.
As you may be aware, the State of New Jersey just released two bills, the Municipal Stabilization Bill (also known as the Atlantic City Takeover Bill) and of more immediate concern to the non-casino taxpayers of Atlantic County, the New PILOT legislation. After a review of the new PILOT bill, I have trepidation because this bill, like its predecessors, is silent on the percentage the county is entitled to receive. While the bill has not passed the Legislature, we believe it prudent to introduce the County budget in order to maintain an adoption date that coincides with the end of the temporary budget. The adoption is scheduled for March 22nd. If the PILOT bill and its attendant consequences are negative, the County will have the time to modify what is being introduced today.
Presently, based on the equalized values and assessment ratios, our 2016 budget is $200,981,620.78. We are more than $7 million below the state mandated budget cap. This budget includes a reduction of $2.9 million in the amount to be raised by taxation. This also accounts for a $7.4 million property tax refund, the bulk of which will be returned to Atlantic City because of over assessed casino properties. Even with this refund, according to the Board of Taxation, the County’s general purpose tax has a reduction of one and two tenths of a cent. We have reduced our salary and wage and other expenses by $3,159,937.61. And this number does not reflect a number of layoffs that the County will implement since the discussions of these changes are still ongoing.
As I mentioned, the proposed casino PILOT legislation does not specify what percentage of payment the county will receive. How can any reasonable person enter into a long term contract without the terms and conditions clearly defined? In the PILOT bill’s statement, which by the way holds no legality, reference is made to 10.4%. The statement also alludes to the expectation that Atlantic County will assume additional responsibility for Atlantic City, which could result in our receiving a 13.5% share. What these additional responsibilities would be, we don’t know. Senator Whelan has mentioned Atlantic City’s police department, but we shall see.
The reason the percentage the County receives is important is because it can amount to an extra $40 million over the life of the PILOT. To put it plainly, if Atlantic County plays ball and assumes certain functions now done by Atlantic City, we may get an additional $4 million a year for the life of the 10 year PILOT. That $4 million is the difference between 10.4% and 13.5%. However, this is purely a guestimate since no percentage is specified or guaranteed in the PILOT legislation.
Since the State Division of Taxation has not been able to answer our questions on how the PILOT legislation will be interpreted, the County can only make reasonable assumptions in this regard. Incidentally, the review commission, called for in the legislation, doesn’t get created until January 1, 2024. Again, if the PILOT doesn’t work it cannot even be evaluated for another eight years!
Keep in mind, the PILOT assures the casinos of no tax increase for 10 years. All the taxpayer gets in return is the casinos’ promise not to appeal their assessments, but this excludes all pending appeals. Wouldn’t it be more prudent to just assess the casinos correctly? And wouldn’t every taxpayer love this arrangement!
Try to imagine as an average taxpayer having stabilized taxes for the next 10 years in exchange for merely accepting your present assessment. No more worries about increases in the salaries of teachers, police or firefighters; no more concerns about the costs of road reconstruction and bridge improvements; no further discussions about the expense to build new schools and recreation fields for our children and grandchildren; no more worries about a lot of things.
With what we know today, we have prepared our budget with a reduction in the number of projected furloughs from 10 days to 5, should they still be needed at all. In the event that the five furlough days are needed they will not begin until the last four months of the year. But again, our hope is that they will not be necessary.
The county library tax and the health tax are each up less than a penny.
I would like to conclude with a suggestion. Given the severity of the economic challenges that face our area, I ask the Board of Freeholders and our municipalities to join in pushing for the inclusion of Atlantic County as a Garden State Growth Zone. Currently only Atlantic City is included among the five designated growth zones in the state. But the high unemployment and property foreclosures extend well beyond the city’s borders. Surely each of our communities could benefit from the Growth Zone designation that is designed to enhance capital investment, business development, and employment. And these goals complement our own efforts to diversify Atlantic County’s economy as outlined in the AngelouEconomics report.
I thank you for allowing me the opportunity to come before you again today and look forward to working with you in the coming year.