New Jersey Casino Expansion Losing Support Among Garden State Voters, Atlantic City Sues State
Posted on: April 20, 2016, 10:08h.
Last updated on: April 20, 2016, 10:20h.
New Jersey casino expansion has the backing of numerous key state lawmakers including Governor Chris Christie (R), but unless the majority of Garden State residents support bringing casinos north, Atlantic City will preserve its gambling monopoly.
A recent poll conducted by the Rutgers-Eagleton Institute of Politics found that just 44 percent of voters feel that casinos should be permitted in jurisdictions outside of Atlantic City, while 49 percent believe gambling should remain restricted to the southeastern beachfront metropolis.
That’s a stark contrast to earlier polling that suggested New Jerseyans favored ending Atlantic City’s gaming exclusivity.
Along with picking a new US president in November, voters in New Jersey will also be challenged with deciding whether to amend their state constitution to allow the construction of additional gambling facilities in northern counties of the state.
AC Moves All-In
Atlantic City is broke and in debt, yet its local government is continuing to spend as if it’s the early 2000s and the local economy is still flourishing with revenues aplenty.
Christie and State Senate President Stephen Sweeney (D) have advocated for the state to assume control of the city’s governance in order to reign in spending. In contrast, Atlantic City Mayor Don Guardian (R) and Assembly Speaker Vincent Prieto (D) favor a rescue plan from the state and the creation of a PILOT (payment in lieu of taxes) program for casinos.
The back-and-forth war between the two parties culminated this week with Atlantic City suing the State of New Jersey for $33.5 million.
Christie allowed a $33.5 million Atlantic City rescue aid package approved by the state legislature to expire on his desk in January. The governor said he would sign the bill if, and only if, the city agreed to a state takeover.
Out of money and still responsible for essential programs such as the public school district and fire and police departments, the Atlantic City Council claims it had no alternative but to take legal action.
“We have to fight back. We believe to balance this thing out, we have to go in front of a judge,” City Council President Marty Small told NJ Advance Media.
City Out of Chips
Guardian says his hands are tied and the ball is in Christie’s court.
“The real issue now is for Governor Christie and the Legislature to agree on a compromise to quickly end the fiscal crisis,” Guardian declared. “I have spoken with many legislators who want to find a compromise . . . I am confident that once we get past the politics, we will find a winning solution that everyone can agree upon.”
With quarterly tax payments set to be received by Atlantic City in early May, Christie and Sweeney want to make sure those monies are directed to the schools before paying government employee salaries, vendors, and other local bills.
Christie said last week that the settlement will be worked out behind closed doors.
“I do not negotiate out in public and I have negotiated plenty on this issue already,” the two-term governor and former presidential candidate explained. “I have told them I want the Sweeney bill as it was originally passed . . . If they have something else they want to show me, I am always willing to listen but I am certainly not changing my position.”
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The upcoming New Jersey referendum will also fail, unless the Legislature determines the tax rates on slots and tables, that will apply for North Jersey gaming. Without tax rates like Pennsylvania's (55% on slots and 14% on tables), there won't be enough tax revenue for Atlantic City to share. New Legislation also needs to determine how much of the new tax will go to AC, and what areas can apply for these funds. There is no question that AC needs to find new revenue for the city and for commercial air support; support that would allow AC to serve places in the Southeast, that have no gaming. But more important, that air availability would allow all of South Jersey to go after the convention, trade show markets, that fill rooms mid week in the off season. A location, like the Meadowlands, offers superior access to North Jersey's 7 million residents, but also to citizens of Manhattan, Staten Island and Orange County, NY. If this casino just equaled the $800 million in slot win earned at Aqueduct, and produced table win revenue like Sands Bethlehem (over $19 million last month)(mostly earned from New Jersey and Manhattan visitors); then if taxed like Pennsylvania (55% on slot and 14% on table win) could produce $450 million or more, giving AC projects and seniors, each in excess of $200 million annually. And if some AC funds were used to induce new air service from the Southeast, then other South Jersey shore resorts would see additional demand on the 200 mid week nights in the Fall, Winter and Spring, especially from conventions, trade shows, corporate meetings and association events, that offer full rate demand for rooms an meals, that the attendees employer pays. And this higher income individual; is also likely to visit the casino without the need for comp rooms, meals, free play or severe discounting. Atlantic City can add some casino win, with new convention and tourism visitors as a result of new air service; but will continually see reduced visitations from Eastern Pennsylvania, New York City and Maryland, where gaming expansion continues. But to have a chance of winning the upcoming referendum, more clarity is needed from the Legislature. And to avoid a repeat of the 1974 referendum, cities allowed to compete for a North Jersey license, should be determined to avoid NIMBY (Not In My Back Yard). Mayor Fullop is already having second thought about Jersey City, one of NJ's larger ones, with 262 thousand residents. However the Meadowlands is in the middle of an industrial area that includes the Met Live Stadium, the unfinished Xanadu Mall, an event arena, the State Fair grounds, and many acres of flat parking; but few if any residents. And the home community, East Rutherford has less than 8 thousand permanent residents. Plus the home county is fully behind a Meadowlands casino. Ideally the Legislature will address the areas in question, and if these additions cannot be added to the scheduled referendum, perhaps the Legislature could decide on the unanswered ones, so that the voters might know what they are potentially deciding.