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Less debt means more freedom, lower taxes!
TALKING POINTS TO EXPLAIN OUR “STOP THE SELL-OUT” LAWSUIT.
1. Atlantic City Problem–Same as State Gas Tax and Pension problems. NJ Taxpayers can no longer afford bloated payrolls, high salaries set during boom of 1990’s.
2. Atlantic City lost 2/3 of its tax base in 2010 — Yet local and public school budgets kept growing like in boom years of 1990’s!
3. October, 2010: State sued Atlantic City for “gross violations” of State “Local Budget Law” and took over City finances.
4. NJ Local Budget law applies to every town and county in NJ. It requires adoption of balanced “cash basis” budget by March of each year.
5. State officials ignored Local Budget Law for next 5 years. They let Atlantic City illegally spend $80 million more than in took in each year for 5 years, adding $400 million to Atlantic City debt.
6. Atlantic City has only 40,000 residents, but $500 million debt. It owes roughly $250 million in Wall Street junk bonds–roughly $250 million in unpaid tax refunds and employee pension and health insurance contributions.
LIBERTY AND PROSPERITY LAWSUIT:
7. It is now August. Atlantic City still did not even begin process of making yearly budget 6 months after February, 2016 deadline.
8. Because it had no budget, Atlantic City could not make payroll in April, or pay for its public schools in May. To avoid a crisis, State advanced $8.5 million for public schools in May, and City delayed April payroll until end of month when much of May taxes were collected.
9. Liberty and Prosperity and three local taxpayers filed suit to force City to adopt budget on April 20, but court delayed hearing of case until August.
10. May 10, 2016: Edward Sasdelli, State Monitor agrees with lawsuit, and instructs Atlantic City to prepare budget, which is then 3 months late. Two weeks later, State Monitor suddenly resigns.
11. May, 2016: State freezes casino tax payments at rock-bottom 2011 levels for next 10 years. Casinos previously paid 65% of city and public school budgets. (During height of casino boom, casinos paid 80%)
12. June, 2016: Liberty and Prosperity amends lawsuit to claim 10 year Casino tax break unconstitutional:
a. Constitution requires all real estate to be assessed and taxed equally, except for limited situations.
b. No special legislation. All laws must apply equally to everyone in state unless there is rational basis for treating one city or group differently.
13. Only 25% of properties still pay real taxes in Atlantic City
a. Casinos pay less than half their true value (PILOT = Peanuts In Lieu of Taxes)
b. 109 stores and shops of TheWalk/Tanger Outlets pay PILOT of one fourth of what they would pay if they paid same taxes as everyone else.
c. Bass Pro Shops Exempt
d. Outlet Parking garages exempt
e. 4,500 units of public and affordable housing exempt.
14. City and State did NOTHING since April. No budget. No cuts. No layoffs. Only solution is bankruptcy/insolvency to cut employees, cut salaries, cut debt
15. State non-solution for 2016 is same as non-solution for previous 5 years. $73 million new debt on top or $500 million old debt. City gives state Bader Field, Water Utility
16. State Plan rammed through in illegal, closed-door meeting on July 28: (Click here for Press of Atlantic City Article–Note these 9 details that were not mentioned:)
a. No advance notice (violation of Open Public Meetings Law)
b. Closed door meeting (violation of Open Public Meetings Law)
c. Resolution did not specifically authorize contract agreed to.
d. Emergency Appropriation cannot be adopted until after budget adopted.
e. Emergency Appropriation needs 6 affirmative votes.
f. Emergency Appropriation in excess of 3% of budget needs review by State
g. Second Resolution to Borrow Money needed with 6 affirmative votes.
h. Budget must be properly introduced, advertised, public hearing pursuant to Local Budget Law
i. Can City afford to repay additional debt? How can we know without knowing tax rate. 100% of debt repayment to be paid by less than 30% of taxable properties.
The matter is set for hearing before Judge Julio Mendez at the Atlantic County Court House in Atlantic City on Monday, August 8 at 9:30 A.M.
Supporting Documents Attached:
1. Memorandum of Law Opposing State’s Motion to Dismiss
2. Additional Counts Seeking to Void New $73 million loan agreement of 7/28/2016
3. Loan Document and Resolution
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Seth Grossman, Executive Director
Liberty and Prosperity 1776, Inc.
453 Shore Road
Somers Point, NJ 08244