Long Answer: Below
The collapse of the gambling industry in Atlantic City has caused an absolutely massive loss of property wealth and taxing capacity.
Eight or nine years ago, casinos owned 85 percent of Atlantic City's real estate, based on assessed values, Mayor Don Guardian said last week. Now, they account for about 55 percent of the assessed values and are expected to keep falling, he said....
A 2007 revaluation boosted the assessed value of all Atlantic City real estate to $20.5 billion from $8.2 billion, with casinos accounting for the bulk of the increase. But since 2010, appeals by casinos hurt by sagging revenue have gutted the tax rolls, which totaled just $11.3 billion in 2014, according to Atlantic County Board of Taxation records
"We're going to continue to spiral down with assessed values, probably more than $3 billion this year. We're eventually going to get down to $7 billion before we level off," Guardian said of the city's overall assessments.
Casinos' assessments have plummeted since 2010 from about $15 billion to less than $6 billion, based on values won on appeals. For example, New Jersey Tax Court in October 2013 slashed Borgata's 2010 assessment to $870 million from $2.3 billion....
The collapsing value of casinos has forced a massive shift in taxes to residents, who for years benefited from the flow of out-of-staters' gambling losses into the city's coffers.
But they're now feeling the pinch as those tax dollars stay in neighboring states that now have gambling, and they've seen their property taxes increase by more than 50 percent in the last two years.
Guardian said he would bring expenses in check so the rise in rates ends.
"The people that are left, the property owners that are left, cannot pick up any more of this cost," Guardian said.
The loss of valuation has been dramatic. In 2007 Atlantic City had the second highest equalized property evaluation in New Jersey (after Jersey City) Now Atlantic City's valuation has fallen to about the seventh highest, behind towns like Toms River and Edison.
Although Atlantic City's schools have always been in DFG A and the students have have an 89% FRL-eligible rate, Atlantic City has never been an Abbott because its local resources were so exceptionally high. Back at the peak of the casino industry in 2007 Atlantic City had more than $3 million in valuation per student, a figure much higher than what Millburn and Princeton have.
Now, in the wake of multiple casino closings in Atlantic City and the destruction of Hurricane Katrina, the been some talk about making Atlantic City the 32nd Abbott district:
The idea hasn't gone far, but it is supported by Senate President Steven Sweeney:
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.”
Sweeney made the same proposal again in December of 2014.
Sweeney, however, said he thought Atlantic City schools were entitled to more aid. The district has long met every social criterion for funding under the state’s former Abbott program. The revenue from the casinos, however, disqualified the district from the program.
Sweeney has a complex proposal for Atlantic City where the casinos would pay a special PILOT instead of property taxes, Under Sweeney's proposal the Atlantic City schools would receive a special category of aid called "commercial valuation stabilization Aid."
I have a lot of sympathy for Atlantic City, but it still should not be an Abbott district.
Even after it's huge loss of property valuation Atlantic City still has $1.58 million in property valuation per student. (11,535,956,503 / 7300 = $1.58 million) It has a 1.1691 tax rate, which translates into a still extremely high $20,826 in per pupil spending, higher than most of the Abbotts.
Compare Atlantic City's valuation per student to the valuation per students of other high-poverty non-Abbotts:
- Prospect Park: $200,000 per student (Adjusted for it being a K-8)
- Freehold Boro: $400,000 per student (Adjusted for it being a K-8)
- Dover: $430,000 per student
- Guttenberg: $570,000 per student (Adjusted for it being a K-8)
- Belleville: $595,022 per student
- East Newark: $325 per student (Adjusted for it being a K-8)
Even if Atlantic City's valuation fell to $7 billion, as Mayor Tom Guardian predicts, it would still have almost $1 million in valuation per student -- a relatively strong tax base. Although the drop to $7 billion is possible, the government is not supposed to distribute money now based on need that may exist in the future.
If Atlantic City became an Abbott it doesn't automatically mean that Atlantic City would get the $15,000 per student amounts that Jersey City, Elizabeth, Newark, Camden etc get, but it would give Atlantic City other special privileges, like guaranteed full SFRA funding, 100% facilities funding from the state, and state-funded Pre-K. Although poor Atlantic City children need Pre-K, so do poor children in numerous other high-poverty districts, such as Lakewood, Dover, Red Bank Boro, Freehold Boro etc and I do not comprehend why Atlantic City's poor children should be ahead in line of poor children elsewhere. As it is, Atlantic City already has more free Pre-K than most non-Abbotts and is getting more.
Atlantic City may need help, but even in a worst-case scenario it would still have more property wealth that most other high-poverty districts. There is no rationale reason to allow Jersey City to cut in line many districts that are still lower-resource than it. This isn't to say that Atlantic City doesn't need help, but the solution should be through respecting SFRA and directing more money through it to needy districts.
Then, there is the issue that New Jersey shouldn't have a class of districts given special privileges by the New Jersey Supreme Court in the first place. There is a continuum of need in New Jersey and the Abbott decision, by giving several major special privileges to the Abbott plaintiffs and not to many districts that are in fact as poor or poorer than they are, has been a mistake and cause of gross unfairness.