Rising property tax rates hurting A.C. residents

Sept. 28--ATLANTIC CITY -- At 66, Audrey Williams is looking for a job to pay the property taxes on the Northside duplex she has owned for 14 years.

Although she retired last New Year's Eve after 33 years as a dealer at Resorts and Showboat, recent events are forcing her back to work.

Ironically, the casino industry that supported her for more than three decades is shrinking, and causing a severe revenue shortfall for the city.

The burgeoning deficit, between what the city used to get from the casinos in property taxes, and what it can extract today with just eight instead of 12 gambling halls, as well as casino tax appeals that have resulted in more than $350 million in refunds by the city, is being passed on to its residents.

Many are seniors on fixed incomes who are already squeezed from paying other bills, including utilities, medical fees, and higher flood and homeowner's insurance because of Hurricane Sandy. They say the increased tax rate will make it that much more difficult to get by.

Atlantic City -- already with among the highest real estate taxes in the country -- approved a 32 percent tax rate increase in July that went into effect Aug. 1 -- the first tax payments are due between Nov. 1-10. That came on top of last year's 17.5 percent hike.

"I was flabbergasted," said Williams, who was born and raised in Atlantic City.</p>

For Williams, the 32 percent hike will mean a $5,200 tax bill for the coming year, $1,300 per quarter from November 2014 to November 2015 -- which is about $3,000 more than she paid the previous year.

"It wasn't really my game plan to go back to work," she said. "I wanted to travel . . . but I have to put those plans on hold and get a part-time job."

The Atlantic City Mayor's Office got flooded with about 2,000 calls after irate residents got their new tax bills in the mail July 23.

Rocko Petino has lived in Atlantic City since 1985. He wants to move out of the three-story, gray-shingled home he had custom-built in 2002 on North New Jersey Avenue in the Snug Harbor area, and head to Florida as soon as he sells it.

The problem: "Who's going to buy a house with those types of taxes?" he asked last week.

Petino, 70, said his property taxes will go up by more than a third from the $8,444 he paid last year.

"I'm fed up," said the former casino shift manager, who worked at Caesars for 31 years. "The casinos are getting a reduction, and ours are going up. But the casinos are the reason we have such huge police and fire departments -- it's for the tourists."

But Atlantic City Mayor Don Guardian announced Tuesday that about 300 city employees will be pared from the city's payroll, bringing the number down to 900. The mayor's spokesman Chris Filiciello said on Saturday, "All options are on the table," when asked if police and firefighters would be exempt from the layoffs.

Guardian's announcement came the day after Standard & Poor's downgraded Atlantic City's credit rating, from A-minus to BBB-plus, citing mainly the closing of four casinos this year and the city's contracting revenue base.

The shuttered gambling halls -- Atlantic Club, Showboat, Revel, and Trump Plaza -- generated about $75 million in property tax revenue last year. A fifth -- Trump Taj Mahal -- may close in November.

In 2006, the then dozen casinos here were 81 percent of the city's ratable base. Last year, they were 61 percent -- a figure that's expected to have another double-digit decline with four closed casinos.

In addition, negotiations the city entered in 2012 with multiple casinos covering several years resulted in $6 billion in assessment reductions. Atlantic City had an assessed value of $20.5 billion in 2010. That was cut by nearly half to $11.3 billion this year. The mayor said he expects at least an additional $2 billion will be lost in assessed value due to the four shutterings.

Property taxes make up 90 percent of the city's $270 million budget this year, so the casino shutdowns are forcing city officials to find new revenue, and quickly.

Williams went to the Atlantic City tax office last week to request that she pay her real estate taxes herself, instead of having them come out of her mortgage. She also asked about appealing her new tax bill but was told she couldn't until January, when the new tax year begins.

"I feel like I am being deprived of my retirement," said Williams, a widow. "I will have to work at least five or six months out of the year just to pay the taxes on my home so I don't lose it."

The general tax rate in Atlantic City -- which includes municipal, school, and county taxes -- jumped from 2.542 per $100 of assessed property value in 2013 to 3.348 this year.

"What we've seen, especially in the last three years, is the increase in the tax rate has been caused mostly by declines in the [city's] tax base," said Keith Szendrey at the Atlantic County Board of Taxation. He said his office received more than 4,000 property tax appeals from Atlantic City this year and last.

Real estate agents say those who put their homes up for sale in Atlantic City could be in for a long wait.

"When taxes are raised that high, and people are losing their jobs, many are concerned," said Bob McClay, an agent with Berkshire Hathaway HomeServices Fox & Roach, Realtors, in Brigantine.

"It will just make it harder to sell the houses at those taxes," said McClay, a former Atlantic City casino floor manager. "I expect we'll really start seeing the effect in about six months."

While its tax base is shrinking, the city is repaying casino tax appeal refunds largely with borrowed money -- putting a further strain on city services.

"One of the big obstacles are the tax breaks and rollover of property taxes at some of the larger casinos," said Andrew Zarnett, a gaming analyst at Deutsche Bank AG. "The balance of Atlantic City can't afford a tax increase of the size that would be needed [to make up the difference in tax revenue], so therefore, government services will continue to contract."

Some say the S&P downgrade last week, and Moody's giving Atlantic City "junk bond status" in July, could scare off investors when the city needs them the most, especially to buy the shuttered casinos. A lowered credit rating means higher interest rates on loans.

Even real estate mogul Donald Trump, who hasn't had a physical presence in Atlantic City the last seven years but is now intimating a comeback to save the closed Trump Plaza and the bankrupt Trump Taj Mahal, said the city's taxes were out of control. Trump is suing Trump Entertainment Resorts Inc. to have his name removed from both casinos because he said they became shabby.

"I brought WrestleMania, UFC [Ultimate Fighting Championships], and Mike Tyson to Atlantic City," Trump said of his heyday as casino owner-showman here. "We need to bring back the events and create excitement and buzz. I wouldn't build just a hotel. I'd go all in. I would do something truly spectacular and great.

"But Atlantic City's taxes are far too high," Trump said. "The Taj is assessed at a billion dollars, and it's worth pennies on the dollar. The city has to renegotiate its debt and bring taxes down, or it won't be viable."

The Taj Mahal is in bankruptcy negotiations with Unite Here Local 54, the union that represents casino workers. The owners have said that if they don't get union concessions, they will close the casino by mid-November.

Jimmy Cheng, 43, doesn't have Trump's portfolio, but he does own a restaurant, a few apartment buildings, and four houses, all in the Lower Chelsea neighborhood. He lives in one of the houses and rents out the rest.

"Everybody's frustrated," Cheng said last week as his restaurant shift ended at 11 p.m. "Many of us bought properties as investors. We poured money into them to improve the city."

Cheng said the property taxes on the home he lives in more than doubled, from $12,000 to $25,000 the last two years.

"It's hard for landlords, too," he said. "We're getting hit with insurance taxes, and now, people [who are renters] losing jobs.

"It's hard to make a living in Atlantic City."

sparmley@phillynews.com

856-779-3928 @SuzParmley

A look at Atlantic City's rising property-tax bills. Graphic, A15.

Casino suppliers are on a losing skid, too. Business, D1.

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