TRENTON – Atlantic City will be permitted to bond for up to $108,500,000 to cover casino tax refunds ordered by settlements earlier in the year, the New Jersey Local Finance Board said Wednesday.
The board approved the city’s proposal after the Atlantic City Council requested the loans to help cover more than $100 million in reported overpaid taxes by casinos to the city, according to published reports.
“We’re looking at all kinds of stuff,” said Atlantic City Business Administrator Ron Cash, telling board members the city is “looking at everything” to trim costs and cut back on municipal spending.
Representatives for the city said Wednesday the request seeks to cover the “onslaught” of tax appeal cases brought against the city.
According to the Press of Atlantic City, $27 million will go to Caesars Entertainment for overpayments on Bally’s Atlantic City and $54 million will go to Trump Entertainment for taxes paid on its local properties: Trump Taj Mahal, Trump Plaza and the former Trump Marina.
The remaining funds will refund $27 million for payments made on the former Hilton property now operated as the Atlantic Club Casino Hotel, according to the newspaper.
If the council gives final approval to the loan, it would more than double the city’s debt.
“I’ll just generally comment to say that the appeals aren’t necessarily the fault of Atlantic City,” said Local Finance Board Chairman Tom Neff.
“I don’t see much of another option here,” he said. “Obviously (they) have to come up with $100 million.”
The application was approved unanimously by the board.
The Atlantic City Council is slated to take a second and final vote on the proposal later this month.
Additionally, the Local Finance Board voted to continue to continue supervising Atlantic City’s financial operations amid “extreme financial distress,” Neff said.
The board approved the proposed extension of the Supervision Act, which gives the board oversight over Atlantic City for a third year.
Neff said oversight over Atlantic City has been positive overall, citing the city’s willingness to be cooperative and work with the state to rein in spending.
“We hope that our role at the state level can be a productive one,” said Neff, explaining Atlantic City has been more cooperative with the oversight than other cities have been in prior years.
Atlantic City officials trimmed $13 million from the budget by cutting more than 180 city employees.
Neff suggested the city reduce spending by cutting nonessential spending, citing the purchasing of city council vehicles, for example.
Kearny tax appeals
The board also approved a $2,750,000 million proposed bond by the town of Kearny for tax appeals, as well as $750,000 in proposed bond refunding for tax appeals.
Neff warned Kearny officials he wouldn’t sign off on future lending requests until town officials took a serious look at consolidating its fire operations. Neff said the town has failed to explain why they have not consolidated fire services or, at the very least, provided an explanation for the lack of consolidation.