Growing up in Atlantic City, our?parents, grandparents, teachers and neighbors told us the stories they heard about Atlantic City when they were young.?? They often spoke of how wonderful it was when people had so much freedom and?opportunity.?? Years later,?we personally saw our city destroyed as?all levels of government got even bigger and more expensive, and robbed us of even more freedom and opportunity.
Here are? some?stories we heard as?children about the early days of Atlantic City.
How Dr. Jonathan Pitney and Sam Richards created a world class resort on an empty island in 1854 with no help from the government.??? How they formed their own company and raised the money they needed by selling stock to friends and neighbors.??? How they then bought the land they needed and built a 600 room hotel and 60 mile railroad line to Camden in less than one year.
How in 1858, they got rid of the mosquitoes and greenhead flies by tearing down the sand dunes and filling in the pools of stagnant water.? How in 1870, they built the first Boardwalk so visitors could look at the ocean without tracking sand into the hotels and railroad cars.
How during the next 50 years,?thousands of newly freed black slaves from the South, persecuted Jews, impoverished Irish, Italian, and German immigrants from Europe, displaced? farmers from all over America flocked to Atlantic City.??? Every winter, they lived in tent cities to build new hotels, saloon, theaters, and amusement parks, and every summer they worked in them.??? After a few years, many?of them owned their own homes and businesses.?? We knew their names because we grew up with their grandchildren.
We believed those stories because we knew so many people in our parents’ generation who came to Atlantic City with nothing and who now owned some of the most successful hotels, shops and businesses in town.
When African-Americans in the South lived in fear of Ku Klux Klan, those in Atlantic City ran hotels, restaurants, nightclubs, and theaters that were as profitable as those run by whites.?? They often called Atlantic City their ?New Promised Land?.?? Streets in the oldest black neighborhood of Atlantic City are still named Lincoln, Grant, Blaine, and McKinley after national Republican leaders from that era.
Inventors and innovators from all over America showed off their inventions and products in Atlantic City.??? Thomas Edison opened one of the first electric generating stations in the country in 1886 to power spectacular lights, amusement, and modern electric trolleys that started running in 1893.?? In 1898, Henry J. Heinz leased a 1,000 foot pier in Atlantic City to show off his food products.
When a bad hurricane damaged or destroyed the Boardwalk and most buildings in September of 1889, the whole town was rebuilt and open for business by the next summer season.?? When John Young?s ?Million Dollar Pier? was destroyed by fire in 1897, it was quickly rebuilt.?? The new Atlantic City High School that was built in 1901 was fully integrated and had such a good reputation, that many foreign diplomats in Washington bought homes in Atlantic City so their kids could go to school here.
When business owners realized that buildings on the beach blocked the view from the Boardwalk and were bad for business, they voluntarily donated their land to the City and made the beach a public park in 1903.
After Labor Day of 1903, the old wooden Chalfonte Hotel at North Carolina Avenue and the Boardwalk was torn down.?? It was replaced by an eight story brick and steel skyscraper hotel that was finished and open for business for the following July 4 weekend?just ten months later.
By 1925, 11 of the 16 fastest trains in the world ran to and from Atlantic City.
Compare that to what happened to Atlantic City when the??baby-boom? generation started growing up in the?1960’s.
In 1965, ?progressive? Democrat President Lyndon Johnson and a super-majority of Democrats in Congress brought the ?Great Society? to Atlantic City.?? It included:
- A new federal Department of Housing and Urban Development (HUD) bulldozed 80 acres of houses, hotels, and businesses near the Steel Pier for ?urban renewal?. Much of that land is still vacant and not paying taxes today.
- HUD built dozens of low ?income, high-crime housing projects throughout the city which paid no local or school real estate taxes.?? As taxes rose for everyone else, dozens of properties were abandoned and vandalized.
- The Federal government?s ?Neighborhood Youth Corps? paid young people more to do nothing in air conditioned government offices nine to five, Mondays through Fridays than they could make working in Boardwalk hotels, restaurants, and amusement rides and arcades.
- New welfare, food stamp, and Medicaid programs of 1965 and 1966 allow poor and minority women to support themselves and their children without husbands.?? Young men without education, skills, or purpose increasingly turn to drugs, crime, and violence.
- New immigration law of 1968 admit large numbers of unskilled, uneducated immigrants from Asia and Latin America, together with European students to work hospitality jobs no longer filled by local residents.
The end result:?? Most local residents no longer have a financial interest in the tourist business.??? Most tourist businesses no longer rely on local students to work summer jobs.
In 1968, New Jersey adopted a new state law that allowed state, county, local, and public school form labor unions.?? In 1979, it effectively forced all public employees to join unions.? ??Public employee unions soon became the strongest political force in the state, and more than 90% of their endorsed candidates were elected each year.? By the 1990?s, public employees earned more money, better benefits, bigger pensions, work fewer hours, and retire much earlier than most people doing the same jobs for private businesses.
In 1973, the state enacted the Coastal Areas Facilities Act? which required major builders to get approvals from the state Department of Environmental Protection as well as local officials.? In 1978 Atlantic City adopted a zoning law that put nearly every building in the City in violation of something.???? This not only made all construction far more expensive, difficult, and time consuming, it also promoted a ?pay to play? political culture for those who sought to ?expedite? their applications.?? It took longer for an Atlantic City homeowner in 1980 to get a permit to add a deck to his back porch than it took Jonathan Pitney needed his 600 room hotel and new railroad to Camden in 1854.
In 1966, there was no sales tax or income tax in New Jersey.?? In 1966, New Jersey enacted a 3% sales tax.?? The sales tax went to 5% in 1970, 6% in 1982, and 7% in 2006.?? New Jersey enacted a 2.5% income tax in 1976 which went to 3.5% in 1982, 7% in 1991, and down to 6.37% in 1994.
Both Republicans and Democrats took part in giving us these??progressive? laws and taxes.?? They had a devastating effect on Atlantic City. Its year-round population declined from 60,000 in 1960, to 48,000 in 1970, to 40,000 in 1980.
In 1976, the people of New Jersey voted to ?rebuild? Atlantic City by legalizing casinos there.??? However, both Democrat and Republican Governors and legislators ignored our state motto.?? They tried to give us “Prosperity without Liberty” and they failed.?? They gave us new laws sand taxes like this:
?The New Jersey Casino Act of 1978 required every casino to have to have 500 ?first class? hotel rooms. This was done to give one casino company, Resorts International, a two year monopoly on casino business.???? This made it impossible for most local businesses to own casinos, and restricted casino ownership to a handful of billion dollar corporations.
The NJ Casino Act of 1978 made it a crime for any casino, or casino employ to run for public office, contribute to any political campaign, or do anything to support or oppose any candidate. As a result, the casino industry had zero political influence in Atlantic City, while most active voters either had government jobs or contracts, or lived in subsidized housing and didn?t pay taxes.?? This ?taxation without representation? and ?representation without taxation? created expensive, ineffective, and non-responsive local government.
?The NJ Casino Act of 1978 forced Atlantic City casinos to pay 1.25% of their gross casino win to a fund controlled by a highly political ?Casino Reinvestment Development Authority? (CRDA).?? That fund was used to reward political friends in much the same way gangster Bugsy Siegel?s rewarded his friends with the 1% he skimmed from his casinos.
In the 1970?s, New Jersery adopted ?fee shifting? laws for lawsuits involving ?consumer fraud?, ?discrimination?, and ?class actions?.?? For more than 200 years, ?lawyers in America were paid by their clients.?? If lawyers got good results for their clients, they got good fees.?? If they recovered little or no money for their clients, lawyers normally got little or no fee.?? During the 1970?s, New Jersey courts and the Legislature changed this law so that lawyers could force the people, businesses, and government agencies they sue to pay big legal fees?even when their clients have little or no damages, and even when their clients get little or no recovery.??? New Jersey also changed the law to allow victims of discrimination to recover money for ?emotional distress? without presenting the medical evidence required in other cases.?? This greatly increased the cost of doing business in New Jersey.? It forces companies to make big cash settlements when they do nothing wrong.?? It makes them afraid to fire or discipline bad employees.?? It drives up the cost of insurance.??? This along with high taxes and electric bills forced many area businesses like Wheaton Industries, Lenox China, and Ocean Spray Cranberry to close down or leave the area.
In 1993:? New Jersey ended free parking at casinos by charging a $2 parking tax at every casino.? Tax increased to $3 in 2003.???? Besides chasing away tourists,? the parking tax discouraged locals from patronizing shops and restaurant at and around the casinos.
In 1999:? Republicans under ?Governor Whitman changed mission of Board of Public Utilities (BPU).? Instead of protecting consumers and keeping rates low, the BPU was ordered to raise electric rates to pay for ?green energy?.??? Democrats under McGreevey and Corzine, and Republican Governor Christie ordered electric companies to raise rates even more.??? In 2010, the Borgata Casino blamed ?higher energy costs? as one of the reasons for reduced profits and layoffs that year.
In 2004, New Jersey added a 5% hotel/motel room tax to the 6% sales tax, plus up to 3% local tax for total of 14%.?? Hotel/Motel rates in New Jersey were already high because of high real estate and business taxes.?? Casino hotels in Atlantic City pay an extra 5% luxury tax, together with an extra 3% tax on alcoholic drinks plus a 9% Atlantic City luxury tax for movies and concerts.? Besides forcing casinos out of business, these high taxes also stopped the popular summer concerts at Bader Field.
In 2007, the New Jersey Casino Control Commission denied license renewal to Tropicana Casino for reasons which had nothing to do with its financial integrity or ability to pay winners at its casino.?? This destroyed 90% of the owner?s $2.75 billion investment in the property and discouraged other investors from building in Atlantic City.?? Former Atlantic City casino owner Steve Wynn remarked in an interview concerning his overseas investments that it is easier to do business in Communist China tghan in New Jerseey.
?In 2009, Democratic Governor Jon Corzine persuaded Morgan Stanley, a Wall Street stockbroker company with no expertise in casinos or hotels, to continue construction before the election, even though it did not have enough financing to complete the building.?? When Corzine lost the election, new Republican Governor Christie worked with Democrats to push through special legislation giving tax abatements and $400 million of state government backed loans to finish the for $2.6 billion?nearly three times the cost of the Borgata.??? State government and union pension funds were invested in the project.?? The Revel was the wrong casino, in the wrong place, at the wrong time, and went bankrupt twice since it opened.??? The Revel? Casino is not the first ?public private partnership? to fail in Atlantic City.?? Other failures include the $100 million Boardwalk Hall with its Boardwalk Bullies, Rodeo, ?and Miss America Pageant, the $16 million baseball stadium, three New Jersey Transit bus stations,? the ?ACES? low speed train to New York.?? Both Republicans and Democrats support these ?public-private partnerships? in spite of the failures because New Jersey makes it impossible for any real private business to succeed without? massive tax exemptions, financing, guaranteed contracts, or other special deals from the government.
?2009-2014:?? Taxable value of real estate in Atlantic City declined from $20.5 billion in 2008 to $12 billion in 2013.??? Yet the cost of operating public schools, county government, and local government in Atlantic City continued to increase.?? In 2012, NJ State government allowed Atlantic City to borrow $103 million over the next 20 years to meet its current expenses, rather than cut spending or raise taxes.?? Because county, local, and public school spending, and debt ?increased in 2014, Atlantic City taxpayers are facing a 47% increase in 2014.??? The Sands Casino closed in 2006, and was demolished in 2007.?? The Atlantic Club Casino closed in January of 2014.???? The Showboat Casino will close at the end of August, 2014.?? The Revel Casino announced it will close at the end of the summer of 2014 if it does not find an buyer or investor.
What happens to America happens to Atlantic City first.? Learn from us!? www.libertyandprosperity.org.