On Friday, April 20, the State of New Jersey and Atlantic County reached a tentative settlement. Although Atlantic County and Liberty & Prosperity both challenged the constitutionality of the PILOT Law, the county’s main goal was to get a [promised] 13.5% share of the PILOT.
Judge Menendez did not yet make a ruling. However, he did encourage the parties to settle the case. [See Consent Order For Settlement Below]
Liberty and Prosperity originally brought the lawsuit to declare that the PILOT Law violated the NJ Constitution. The State Constitution requires all real estate to be assessed by the same method, and taxed at the same rate.
Atty. Seth Grossman sent a letter to Mayor Frank Gilliam: This is a rotten deal for Atlantic City.
In Seth’s opinion, Judge Mendez failed to decide this case, and rule the PILOT Law unconstitutional, because he was concerned that if the PILOT got knocked out, the casinos would pay even less.
Grossman warned Mayor Gilliam, Council President Small and all of Council, that the proposed settlement order does nothing to protect Atlantic City after 2018.
All State promises are “subject to appropriation”. They can’t be enforced because of the New Jersey State Constitution. Grossman says every additional dollar paid to the County, is a dollar taken away from the Atlantic City municipal and public school budgets.
Here is the transcript of the settlement conference:Atlantic County - Transcript of Settlement Conference 04 20 18 (1)
The settlement also provided that the State would give Atlantic City additional aid. Atlantic City Public Schools will also get less money because of the extra money paid to the county. The State has no obligation to offset increases in the school tax.
The State does NOT guarantee that it will pay any money it’s promising to pay. That’s because the money promised by the state is to be paid during the 8 years from 2019 to through 2026. However, the NJ State Constitution does not allow state government to incur future obligations without voter approval in a statewide referendum.
During the negotiations, the City was completely unrepresented. The attorney for the City was John Lloyd of the Jeff Chiesa Law Firm. That law firm was appointed by State Government, and took the position of the State during the litigation and negotiations.
No attorney for the City of Atlantic City took part in any of the settlement discussions on April 20.