The New Jersey General Assembly voted Thursday afternoon to approve providing temporary financial relief for Atlantic City casinos.
The Assembly passed S2400/A4032 by a vote of 71 to 5, with three abstentions. The state Senate passed a different version in June and must now consider the recently amended bill.
As originally introduced, the emergency relief bills would have provided both permanent and temporary tax breaks for the casinos. The length and scope of the industry relief have been scaled back with amendments, The Press of Atlantic City reports.
In explaining the need to help out a multi-billion industry, lawmakers cited a “catastrophic and unprecedented economic contraction,” to Atlantic City and the surrounding area as a result of the 107-day shutdown of the casinos. The shutdown resulted in more than $112 million in operating losses for the gambling parlors and a nearly 50% reduction of the industry’s workforce.
The proposed legislation allows for a reduction in taxes paid on gross gaming revenue and a monthly deduction against gross gaming revenue equal to the amount of promotional gaming credits (free and/or match play) used by customers. Both provisions are applicable for one year from the date the casinos were permitted to reopen, which was July 2. The bill also requires the casinos to make a “good faith effort,” to hire as many former and new employees to align with any increase in business.
State Sen. Chris Brown, R-Atlantic, was a primary sponsor of the upper chamber version, along with Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, and said the bill was a bipartisan effort toward getting people back to work “as quickly as possible in a responsible manner.”
“Remember, our goal is to get employment back up to pre-pandemic levels when over 27,000 local families held casino jobs,” Brown said. “We have to take these initial steps and develop a plan, not a bailout, to help our local economy recover as quickly as possible.”
The legislation was amended in committee to remove tax breaks on hotel and parking fees and also to eliminate a provision that would have required the Casino Reinvestment Development Authority to pay for city marketing.
Throughout committee hearings on the legislation, lawmakers and advocates expressed concern that the tax breaks would result in a reduction of senior and disabled services since those programs rely heavily on funding from the Casino Revenue Fund, which is funded through casino-related taxes and fees. The bill was amended to ensure that rural transportation services for seniors and the disabled are funded to pre-pandemic levels.
Assemblymen Vince Mazzeo and John Armato, both D-Atlantic, had initial reservations about the bill when it was introduced, but signed on as co-sponsors after the legislation was amended to remove permanent tax breaks for the casinos.
Armato said the “concessions made on this bill were imperative.” "We are glad that leadership took our concerns seriously,” he said. “Atlantic City will be feeling the down turn in the economy like the rest of the state and country. Ensuring that we do not intentionally worsen that or place any extra burden on the tax payers is our top priority.”
Armato said he and Mazzeo remain opposed to companion legislation that was introduced for the casinos which would permit the state treasury to provide interest-free loans to the gambling parlors at the expense of the senior freeze and homestead rebate fund, calling it a line they were not “willing to cross.”