Though Atlantic City was demographically poorer and more "urban" than
Exclusion from the Abbott list was something that Atlantic City could manage given how enormous its tax base was until the 2010s.
Throughout the 1990s and again in 2008 when its Equalized Valuation peaked at $22.2 billion, Atlantic City had the largest Equalized Valuation in New Jersey. At its peak in 2008, Atlantic City's school tax rate was only 0.44 and yet it was able to sustain $17,600 per student in spending, a much higher amount than the South Jersey Abbotts like Vineland, Bridgeton, Millville, and Pleasantville.
Atlantic City remained a high-tax base district until the 2010s.
Then, unfortunately, other Mid-Atlantic states got the idea to open casinos, Atlantic City tourist numbers dropped, and Atlantic City's tax base started to implode.
In 2013 alone, the Borgata challenged its $2.3 billion assessment and got it down to $870 million. Then, in 2015, the Borgota appealed again and got another lower assessment.
Then other casinos started to close altogether like the Sands, the Revel, Showboat, the Trump Plaza, and the Atlantic Club. Atlantic City mayor Don Guardian predicted Atlantic City's valuation would stabilize around $7 billion.
As Atlantic City's casinos closed and the tax base collapsed, Atlantic City did not cut its tax levy proportionally and the tax rate soared and fell more heavily on residential homeowners. By 2014-15 the school tax rate had risen from 0.44 to 1.1691.
In 2015 Senate President Steve Sweeney said that Atlantic City should become an Abbott.
After hearing complaints from residents facing a huge hike in their property taxes, state Senate President Stephen Sweeney (D-Gloucester) today said that the state should consider sending more aid to Atlantic City schools.
Sweeney, on a South Jersey radio call-in show, suggested making Atlantic City an “Abbott district,” which is named for a series of court cases in which the state Supreme Court said residents of New Jersey's poorest cities have a right to well-funded schools.
“One of the other things that has to be looked at now is, with all these tax decisions does Atlantic City now qualify or deserve to be an Abbott district?” Sweeney said on the show, Pinky’s Corner. “When the casino revenues were high, no they didn’t qualify. But now the numbers have to look at, the picture has to be reevaluated. That would help the tax base in Atlantic City.”
In 2015 Atlantic City still had an above-average tax base (its Equalized Valuation was $11.3 billion, the seventh largest in NJ), so I disagreed with Sweeney at the time, but by now Atlantic City has fallen farther than even pessimists predicted and Abbott status is merited.
In 2014-15 Atlantic City's school tax rate had been 1.1691, but by 2017-18 it was 1.1911. For 2018-19, if new state aid does not arrive and the tax levy stays constant at $82 million, the tax rate would be 1.86! (1.86 = $82 million / $4.4 billion)
In 2014-15 Atlantic City's school tax rate had been 1.1691, but by 2017-18 it was 1.1911. For 2018-19, if new state aid does not arrive and the tax levy stays constant at $82 million, the tax rate would be 1.86! (1.86 = $82 million / $4.4 billion)
Demographics
The first reason Abbott status is warranted is that Atlantic City's demographics are among the most challenging in New Jersey.
Atlantic City's FRL-eligibility rate is in the bottom ten for New Jersey.
1. Camden City, 95%
2. Union City, 95%
3. Seaside Heights, 94%
4. Woodlynne, 93%
5. Asbury Park, 93%
6. Bridgeton, 93%
7. Passaic, 91%
8. Paterson, 90%
9. Trenton, 89%
10. Atlantic City, 89%
Tax Base
Atlantic City's tax base is well below the state's average, although it is not at the same ranking as its FRL-eligibility.
That $8300 per student is low, but is only in the state's bottom quarter.
However, the 2017-18 Local Fair Share is based on Atlantic City's $6.4 billion in Equalized Valuation for tax year 2017.
Since then, the tax year 2018 Equalized Valuations have come out and Atlantic City's Equalized Valuation fell from $6.4 billion to $4.4 billion. That $2 billion drop in Equalized Valuation should diminish Atlantic City's Local Fair Share by at least $14 million, or a 25% fall.
Since the 2017-18 Local Fair Shares are already out of date, I will calculate Equalized Valuation per student for the Abbotts.
This is the Equalized Valuation per student of all the Abbotts, plus Atlantic City. Although Atlantic City's Equalized Valuation per student is still above the Abbott average, there are several Abbotts whose tax bases are superior and yet do not even have equivalent student poverty.
Since then, the tax year 2018 Equalized Valuations have come out and Atlantic City's Equalized Valuation fell from $6.4 billion to $4.4 billion. That $2 billion drop in Equalized Valuation should diminish Atlantic City's Local Fair Share by at least $14 million, or a 25% fall.
Since the 2017-18 Local Fair Shares are already out of date, I will calculate Equalized Valuation per student for the Abbotts.
This is the Equalized Valuation per student of all the Abbotts, plus Atlantic City. Although Atlantic City's Equalized Valuation per student is still above the Abbott average, there are several Abbotts whose tax bases are superior and yet do not even have equivalent student poverty.
Implications of Abbottization?
It's hard to say what becoming an Abbott would mean for Atlantic City.
SFRA created a unitary funding formula for K-12 aid, but preserved the Abbotts' rights to100% state funding for construction and 100% funding for PreK for all 3s and 4s in the Abbotts.
Due to SFRA's unitary formula for K-12 aid, Atlantic City's problem for K-12 aid isn't that it lacks Abbott status, it is that it is severely underaided anyway. For 2017-18 SFRA already says that Atlantic City should get $79.3 million, but the state only gives it $56 million (which is $24 million in regular DOE money and another $32 million in "Commercial Valuation Stabilization Aid" which comes from other state agencies.)
Atlantic City already gets $3.3 million in PreK aid, which I can infer is much less than it would get if it were an Abbott.
I do not know the size of Atlantic City's age 3 and age 4 cohort, but based on proportionality with the Abbotts, Atlantic City is not getting nearly enough PreK money for every child there.
For instance, Pleasantville, which has 3,000 fewer students than Atlantic City, gets $6.9 million in PreK money. Millville, which has 1800 fewer students than Atlantic City, gets $8.5 million in PreK money. Long Branch, which has 1600 fewer students than Atlantic City gets $9.8 million. (source, DOE State Aid Summaries)
Keansburg has only 1400 students total and it gets $2.8 million for PreK.
Although Abbottizing Atlantic City doesn't seem to be on the table anymore, I hope it does come up because a conversation around Abbottizing Atlantic City might also inspire conversation about other updates to the Abbott list, including the deAbbottization of definitely Hoboken and perhaps Jersey City, Long Branch and Pemberton.
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