BRIGANTINE — The two state assemblymen who represent Brigantine, Republican Chris Brown and Democrat Vince Mazzeo, attended the Brigantine Taxpayers Association's public forum Saturday morning, June 3, at the Community Center to help explain the Casino Property Tax Stabilization Act, better known as the PILOT law.

The PILOT legislation — short for payment in lieu of taxes — was created to allow casinos to make fixed payments to Atlantic City in an effort to stop the casinos from appealing their assessed value and lowering their tax payments. It was also created to help stabilize a city in financial shambles and an industry that has seen five casinos close in Atlantic City since 2014.

Under the initial PILOT agreement, Atlantic City was to distribute 13.5 percent of the cumulative gross casino gaming revenue it received to Atlantic County, and each municipality would get its share based on the county tax ratable base. Since the initial agreement, the state allowed Atlantic City to lower its PILOT payments more than 3 percentage points. The difference over that 10-year period would be about $40 million — or $4 million annually — less than the county was originally expecting to receive, which is likely to cause a substantial tax increase for all property owners in Atlantic County.

Recently, both the Atlantic County Mayors Association and the Atlantic County Board of Chosen Freeholders voted to sue the state over the constitutionality of the PILOT law.

Saturday's meeting was structured to allow each state representative to explain his position on the PILOT, then field questions from the audience. The meeting got off to a strange start when state Sen. Jim Whelan, D-2nd, one of the sponsors of the PILOT bill, took a seat next to the two assemblymen and was promptly asked by BTA President Anne Phillips to sit in the audience. Whelan asserted that as a sponsor of the PILOT bill he should have the right to field questions about it also, but Phillips did not relent and Whelan, who is not running for re-election, left the building.

After the two assemblymen stated their positions, the first question came from WOND radio host Don Williams, who asked why Whelan was not allowed to be part of the panel. Phillips said that a member of each political party involved in the PILOT legislation was invited to participate, and it was to remain that way to maintain balance.

“Since these two gentlemen are going to be in the Assembly through the end of this year, and since each worked on the bill in the preceding year, we felt that that would be adequate to get information to the people of Brigantine,” said Phillips. “I don't know what happened or where the miscommunication was with Sen. Whelan, but we wanted one of each party, and to have someone unbalance that would have been inappropriate.”

Mazzeo worked with Whelan to sponsor the PILOT bill in its current form. Brown said he was initially against the PILOT but agreed to vote for it when compromises were put in place, including that the county get 13.5 percent.

No specific percentage was ever written into the bill when it passed, but Brown said Gov. Chris Christie — who spearheaded the state takeover of Atlantic City — went back on his word by lowering the verbally agreed upon 13.5 percent to 10.4 percent.

In his opening statement, Mazzeo said that over the past four years, the county payout from Atlantic City's gross gaming revenue was much more in line with 10.4 percent than 13.5 percent.

“You have to look at what we're up against here,” said Mazzeo. “The PILOT bill was to stop the bleeding, and if you look at what's happening in Atlantic City right now, we have investments, we have the city turning around, and we have no more casino tax appeals. As a business person myself, the first thing any business is going to look for when it comes to a town is how the government is doing. And in Atlantic City you see stabilization, which is happening because of the PILOT bill.”

Brown said that, as initially worded, the PILOT would have allowed casinos to pay less than the fixed amount of $120 million over 10 years if their cumulative gross gaming revenues decreased. He said a clause would have allowed casinos to opt out of the PILOT and go back to appealing their taxes if they so chose, and another clause would have permitted a casino's parent company to acquire other properties in Atlantic City, take them off the tax map and incorporate them into the PILOT program with no additional taxes. Through Brown's influence and that of other legislators, he said, changes were made to remove those stipulations from the bill.

A measure he worked on with Assembly Speaker Vincent Prieto would also have put the 13.5 percent figure into the bill, but that never amounted to anything more than a verbal agreement the governor promised then reneged on, said Brown.

“I fought tooth and nail for those changes to make it better for all of us who live and work in Atlantic County,” said Brown. “It was done in a nonpartisan manner. It was not about party but doing the right thing. One of the things politicians will tend to say (about an opponent) is 'He was for it before and now he's against it.' No, I fought like heck along with Speaker Prieto to make those changes. If anybody says I voted for the PILOT, that is inaccurate. I voted for a compromise.

An audience member asked why the legislators did not work more closely with the County Mayors Association and County Executive Dennis Levinson before introducing the PILOT bill.

“There were so many tax appeals, we had to get this bill through,” said Mazzeo. “I'm convinced that this bill, in the long term of it, is going to be good for Atlantic City and Atlantic County. It will stop the tax appeals. And the investments this is bringing to Atlantic City and the county will benefit all of us in the future. Investors want to see a government that is stabilized, and I believe the PILOT bill is doing that.”

“Vince (Prieto) and I attended bipartisan Mayors Association and Freeholder Board meetings, and we voted to put the 13.5 into the bill. We thought we were all on the same page,” said Brown, noting that Mazzeo, Whelan and state Senate President Steve Sweeney rushed the PILOT legislation through the Assembly without adequate opportunity for discussion. “And this notion about investment in Atlantic City because of the PILOT — we stopped North Jersey casinos, that's why we got investments. Hard Rock held a press conference to say they're building a billion-dollar casino in the Meadowlands. We beat North Jersey casinos, and Hard Rock came here instead. That's why we're seeing investments, because we stood up to casinos in North Jersey.”

Mayor Phil Guenther mentioned that the Mayors Association “reluctantly supported the PILOT because we were were assured we'd have 13.5 percent of the $120 million.” He said a more sensible alternative to the PILOT — and an alternative he hopes is still an option — is the implementation of countywide property assessments that are fairly divided among all municipalities, similar to what Gloucester County does.

“Assemblyman Mazzeo said he's going to present a bill, and we appreciate that, however the bill as it was first presented is flawed,” said Guenther. “In Brigantine alone it would cost us $100,000 more than we're currently paying,” which would also be the case for all Atlantic County communities with larger ratable bases, said the mayor. The question was whether the assemblymen could work together with the Mayors Association to make a countywide assessment that is mutually fair, and if so, might legislation then be introduced to eliminate the PILOT bill.

“Is it possible? Absolutely,” said Brown. “The real question is, can we work together? The PILOT didn't stabilize anything, and the Mayors Association, the Freeholder Board and the (Atlantic County) Board of Taxation being against it is clear evidence of that.”

Phillips asked what all this meant to taxpayers going forward. The unified answer was that, as it stands, the PILOT is locked in at 10.4 percent, unless legislators can ratify the bill into something everyone can agree on, or unless the court system mandates a change.

“There's a bill on the table, and there's always room for improvements,” said Mazzeo. “I'd be willing to work with mayors and the taxation board to see that it's fair.”

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