Op-Ed: Critical Information is Missing in Push to Expand Casinos in New Jersey

Njspotlight.com 2/25/2016

Here we go again: another hasty proposal to convince legislators and the public that more gambling will painlessly create jobs, grow the economy and enrich the state’s coffers. This year’s stampede by the governor and legislative leaders is to expand casino gambling to North Jersey, now that the Atlantic City monopoly has been broken and the Northeast casino market is saturated in all neighboring states.
The advocates for two new casinos assert that two powerful reasons prevail for the action:
• Two new casinos will help ignite the state’s economy, creating thousands of new jobs and producing substantial new tax revenues.
• Some of those new revenues will help stabilize Atlantic City and put it back on the road to becoming a viable non-casino tourist destination.
These are worthy goals, but their attainment by expanding casinos to the north is highly unlikely. Before casting a vote, both legislators and citizens should have answers to at least these crucial questions:
Instead of saving Atlantic City, won’t two North-Jersey casinos only accelerate its decline?
Four of Atlantic City’s 12 casinos closed in 2014, and Wall Street analysts project that North Jersey casinos would quickly close two or three of the eight that are left.In the meantime, the Atlantic City government is near bankruptcy and state initiatives to restore the city have been laggard and ineffective.
Will New York stand quietly by, while New Jersey steals its resident and tourist gamblers?
New Jersey surrendered its 25-year monopoly on the East Coast to casinos and “racinos” opening in Pennsylvania, Delaware, Connecticut and Maryland without so much as a peep. Despite the saturation in a casino market that is showing little or no growth, neighboring states persist in carving the market into smaller pieces – eight new casinos are scheduled to open in the Northeast in the next three years.
How can such generous revenue promise be made without specifying tax rates?
As the question of what tax rate new casinos will pay has surfaced, proponents of expanding gambling have done their best to shove these concerns aside. The Senate president, for example, says he’d prefer to address the tax rate after the amendment clears the Legislature.
How will necessary transportation improvements be made, and who will pay for them?
None of the casino expansion proponents have mentioned that traffic congestion and public transit delays in Hudson and Bergen counties are already a daily problem. Even before the area’s largest mall, American Dream, opens (it’s scheduled to open next year), Routes 3 and 17 are already among the most heavily traveled roads in New Jersey. No mention in the transportation capital plan through 2021 is made of major improvements to southern Bergen County.
It must be that New Jersey’s political leaders fear that an open discussion of these questions will hinder their lickety-split drive to slide the referendum past the Legislature and the citizens of New Jersey.

BPU Blocks JCP&L Plan to Spin off Transmission Assets as Public Utility

Njspotlight.com 2/25/2016
Jersey Central Power & Light’s plans to spin off a major part of its business into a separate company suffered a setback yesterday when state regulators denied a vital component of the transaction. The decision by the New Jersey Board of Public Utilities has implications on how much oversight it would retain over the new entity, a standalone transmission company, and perhaps whether the utility’s parent, FirstEnergy, goes ahead with the proposal. The Akron, Ohio-based energy conglomerate filed a petition with the state last year to spin off the transmission assets of JCP&L into a separate company, a step it has already taken with utilities it owns in other states. The BPU ruling affects only one aspect of the proposal — that the new transmission company be declared a public utility in New Jersey. But the board, relying on legal advice from staff and the Attorney General’s office said the transmission-only company could not be defined as a “public utility’’ based on a reading of the state’s 17-year-old law deregulating electric utilities. The distinction is important because if the new entity, dubbed the Mid-Atlantic Interstate Transmission (MAIT) LLC, is not a public utility, the BPU would retain the limited jurisdiction it now has over such matters as vegetation management of high-voltage power lines in the utility’s territory. Perhaps more importantly, the new transmission company would not have the power of eminent domain in acquiring land it needs to build new or expanded high-voltage power lines. It also no longer would have the right to petition the BPU for approval of a selected route, and instead would have to secure approval from each of the municipalities it traverses — a more burdensome and time-consuming undertaking.

These towns are now challenging hospitals’ tax-free status

Nj.com 2/24/2016
A dozen municipalities across the state are challenging the tax-exempt status of the non-profit hospitals in their communities, sparked by Morristown winning a $15.5 million settlement against a hospital last year. Martin Allen, who represents Morristown against Atlantic Health System, owners of the Morristown Medical Center, said he has filed tax appeals on behalf of Belleville, Freehold, Long Branch, New Brunswick, Rahway, Raritan Township and Summit. Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association said she is aware that municipalities have filed tax appeals against another five hospitals, although she could not confirm them Wednesday (Feb. 23) night. Allen said he didn’t know whether these seven nonprofit hospitals have structured their organizations the same way Morristown Medical did, which troubled Tax Court Judge Vito Bianco in June. The hospital in Morristown created “labyrinthine corporate structures, intertwined with both non-profit and for-profit subsidiaries and unaffiliated corporate entities,” the decision said. The hospital is paying the settlement over 10 years. The disputes include: New Brunswick challenging Robert Wood Johnson University Hospital; Freehold challenging Centrastate Medical Center; Summit challenging Overlook; Belleville challenging Clara Maass Medical Center; Raritan Township challenging Hunterdon Medical Center;Long Branch challenging Monmouth Medical Center; Rahway challenging Robert Wood Johnson University Hospital. In anticipation of more tax appeal cases, state lawmakers passed a bill last session that would have imposed a per-bed fee paid to the host community in lieu of property taxes. Gov. Chris Christie took no action on the bill, letting it die.

JCP&L announces final stage of $48M transmission line project

NJbiz.com 02/23/2016

Jersey Central Power & Light announced it has started construction on the final stage of an 11.5-mile transmission line project, which the company says will increase reliability and help meet the growing demand for electricity in Mercer, Middlesex and Monmouth counties. Of the project, JCP&L President James Fakult said: “This transmission project is an important part of our continuing efforts to enhance reliability and help make our system more robust. Projects like this help make our system more resilient and help reduce the number and duration of outages our customers might experience.” According to JCP&L, the total cost of the project is $48 million, with $18.8 million of that cost expected to be spent this year. The final segment of the project involves constructing an eight-mile section of a transmission line between an existing JCP&L substation in Hightstown and a transmission structure located along Route 33 near Manalapan. The previous part of the project, which was completed in 2013, involved replacing or rebuilding transmission structures along three miles between substations in Manalapan to Millstone. The project, which is part of JCP&L’s multiyear, $250 million “Energizing the Future” transmission system reliability enhancement program, is expected to be completed by June 2016. It will help augment service to nearly 34,000 customers in East Windsor, Englishtown, Hightstown, Manalapan, Millstone and Monroe.

Hospitals, lawmakers wait for a clue from Christie on tax exemption

CapitalNewYork.com 02/23/2016

As some municipalities begin a legal push challenging the tax-exempt status of local nonprofit hospitals, legislators and hospitals say they’re waiting for guidance from Gov. Chris Christie. Christie pocket-vetoed a bipartisan bill last session that would have let nonprofit hospitals that conduct some for-profit medical activities make annual community contributions and still maintain a tax-exempt status. The bill’s sponsors, as well as the New Jersey Hospital Association and New Jersey State League of Municipalities, say the governor has yet to explain his reasoning for the veto or what he would like to see included in revised legislation. NJHA supported the bill, while the League argued that there were potential constitutional issues with the legislation and that the proposed payments might not be high enough. In the meantime, at least seven municipalities have filed complaints regarding omitted tax assessments from area nonprofit hospitals for 2014 and 2015 with the Tax Court of New Jersey.

In July, Tax Court Judge Vito Bianco ruled that most of Morristown Medical Center’s campus did not qualify for tax-exempt status from 2006 to 2008 because of for-profit activities, particularly the use of the facilities by physicians who were in private practice and generated income from seeing patients at the hospital. In November, the hospital reached a $26.5 million settlement with Morristown. Singer said he hoped the governor would issue an executive order to stay the Morristown decision while a legislative solution continues to be worked out. Senate President Stephen Sweeney, another sponsor of the bill, said he will work to “advance a new bill as soon as we can.” On Tuesday, the Newark Municipal Council invited Martin Allen, special counsel for the town of Morristown, to present information on the case at a public hearing as council members sought to explore the potential implications of the ruling for Newark-area hospitals. Following the meeting, Allen told POLTICO New Jersey he has filed complaints for omitted tax assessments for 2014 and 2015 for seven municipalities.

A spokesperson for CentraState said the hospital already pays $1.7 million in total annual property taxes to Freehold Township. A spokesperson for Atlantic Health System, which includes Overlook, said the hospital doesn’t comment on pending litigation. The other hospitals did not immediately respond to requests for comment. Michael Darcy, executive director of the New Jersey State League of Municipalities, said it makes sense that certain municipalities are going to Tax Court at the same time that a legislative solution is being drafted, because it’s “anybody’s guess” which “path is going to work faster.”