Atlantic City Seeks to Reduce State Funding Dependence Amid Financial Recovery

ATLANTIC CITY, NJ – Since 2016, Atlantic City has received more than $800 million in state funding to help pay off casino tax appeals and stabilize its finances, preventing the city from falling into bankruptcy. But as the city’s financial outlook improves, local and state officials are now aiming to reduce the city’s reliance on these state funds over the next few years. Through the Casino Reinvestment Development Authority’s investment alternative tax (IAT) funds, Atlantic City has received $269 million to address the debt incurred from casino property tax appeals. Additionally, the city has benefited from over $532 million in other forms of state aid, including transitional aid. The funds have played a pivotal role in facilitating six consecutive property tax decreases, a significant reduction in the city’s tax levy, and several bond rating upgrades. For instance, the city’s tax levy dropped from over $128 million in 2015 to $34.8 million last year. Mayor Marty Small Sr. highlighted that the state funding has helped pay off a portion of the casino tax appeals, which total $194 million over the last five years. He emphasized that the money received from state aid would have otherwise been owed by the casinos under traditional tax structures.  While state aid has been essential, the city’s financial health has steadily improved. The 2024 budget, totaling $225 million, was supported by $120 million in state funding, which includes IATs and transitional aid. Moody’s Ratings recently upgraded the city’s bond rating due to its improved financial conditions. However, state officials, including Marc H. Pfeiffer of Rutgers University, explained that Atlantic City has long been treated differently due to its unique mix of casinos and residents, nearly 34% of whom live below the poverty line. The city has relied on state engagement to supplement municipal revenue, which is traditionally generated through property taxes. Despite this ongoing reliance on state aid, Atlantic City’s leadership remains hopeful that over time, the city will be able to reduce its dependence on these funds as its financial position strengthens further.