Atlantic City Casinos Tax Break Still in the Air

New Jersey is now appealing the Court’s most recent ruling in favor of Atlantic County and nonprofit Liberty and Prosperity 1776. The ongoing dispute has raised accusations of preferential treatment and depriving local communities of much-needed income. With millions on the line, each side will fight to the end to secure what they believe is their just dues.

The State Butts Heads with Atlantic County

In 2021, the state administration passed an amendment to the PILOT taxation system to help casinos deal with the fallout of the pandemic. The new legislation had the strong approval of Gov. Phil Murphy and saved the casino industry $55 million in 2022. However, the tax break had an immediate and direct impact on Atlantic City schools and communities which strongly depend on these funds, driving a wedge between Atlantic County and the state.

A conservative NGO named Liberty and Prosperity 1776 quickly filed a lawsuit against the amendment. Atlantic County followed suit, arguing that the amendment violated the state’s constitution’s banning of preferential taxation. The two parties also argued that the Atlantic City Casino industry did not even require the tax breaks, drawing attention to its rising revenue.

Judge Joseph Marczyk of the Superior Court eventually ruled in favor of Atlantic County, agreeing that the new PILOT amendment was unlawful. However, the Murphy administration is now appealing the Superior Court rulings in a final effort to save the amended legislation and preserve their image in the face of ongoing controversy.

A Swift Resolution Is Nowhere in Sight

Gov. Murphy, a staunch proponent of the contested tax breaks, was, until recently, conspicuously silent regarding the growing debacle. He finally addressed the matter on 2 February during an interview with WNYC, promising that the casino industry would pay its fair share as part of his efforts to create a more robust and equitable economy.

Tax fairness is really important to us… If we don’t quite get it right, we’ll come back at it and do everything we can to get it right.

Gov. Phil Murphy

The Governor’s comments immediately sparked criticism from his opponents, who again drew attention to the State Constitution prohibiting preferential taxation. If the amended PILOT remains in place, Atlantic County will lose roughly $19.3 million by 2026, placing an unequal burden on local taxpayers compared to the rest of the state. Liberty and Prosperity and Atlantic County plan to respond to the state’s recent appeal, so a final decision is likely still months away.