Lawmakers in New Jersey are preparing tax breaks for the casino operators to help them weather the current storm out. Reminiscent of the 2007-2009 economic crisis developments when the casino industry in Atlantic City suffered huge losses and four casinos went out of business, state legislators are making sure the scenario does not repeat itself. Even at the expense of services for seniors and people with disabilities.
Tax Breaks for Casinos in the Works
State legislature saw on Thursday a bipartisan effort that would provide casinos with different tax breaks to help them ease financial troubles amid the ongoing health crisis clear a key Senate committee. In addition to the tax breaks, the proposed bill is making provisions for $100 million from the federal Coronavirus Aid, Relief and Economic Security (CARES) fund to be used for small businesses across the state, obviously to facilitate swallowing the casino aid pill.
The proposed bill will allow for several technical changes regarding some of the taxes and fees payable by casinos under current law, including licensing fees, as well as the way revenue from those taxes and fees can be used. The bill will also make provisions for some of the amendments to the tax policies remain in effect for up to two years.
Atlantic City that has its casino venues closed since March 16, when a state-wide order from Gov. Phill Murphy ordered non-essential businesses to stop operations, is desperately looking into different ways to bring back people to the businesses. Last week, Atlantic City’s Mayor passed an executive order to allow people on the Boardwalk and surrounding streets have drinks while strolling, a temporary measure until November or restrictions on bars are lifted, aimed at facilitating businesses to get back to pre-closure levels.
Insufficient Casino Funds May Impact Certain Services
Despite being passed with the majority of the votes through the Senate Budget and Appropriations Committee Thursday, it was not without some concerns being expressed. Several county governments’ representatives pointed out the proposed changes would have knock-on effect on services reliable to the Casino Revenue Fund, as more than a dozen different services, under the state gambling rules established when gambling was legalized in New Jersey, receive a portion of their funding from the fund.
The primary sponsor of the bill, Senate President Steve Sweeney, acknowledged the fact that maintaining these services would remain a top priority while legislators were looking into ways to prevent new casino closures. And while several other lawmakers showed willingness to insert additional amendments to alleviate concerns raised by county officials, others pointed out it takes a healthy casino industry to have a flush Casino Revenue Fund capable of supporting these services.
The proposed measure could come up for a full Senate vote as early as last week, yet it is not clear whether additional amendments to prevent potential knock-on effects will be introduced.