The current local tax rate that the council adopted in June is nearly $1.39 per $100 of assessed property value.
"The No. 1 reason why taxes are so high is decreased property values," Guardian said. Of the proposed 65-cent municipal tax increase, Guardian said, 61 cents was due to the decrease in assessed property values citywide.
None has dropped more precipitously than that of casinos - Atlantic City's largest taxpayers. Total assessed property values for this year were about $11.2 billion, nearly half of what they were in 2010, when they topped $20 billion.
Casino valuations in New Jersey are based on the income they generate. Atlantic City has lost about a third of its tax base since 2008, mostly because of the hit in property-tax revenue.
The Community Affairs Department has been monitoring Atlantic City's finances for the last three years, about the same time that several casinos appealed their property taxes and won substantial refunds. The refunds have cost the city more than $270 million using borrowed money.
The most recent tax-appeal hit to Atlantic City came in October when the Borgata, the city's top-grossing casino and largest taxpayer, won a nearly $49 million property-tax refund, plus interest, in state Tax Court. The city government, now headed by Guardian, is appealing the ruling.
When he spoke before a major business group in January, Guardian said he would seek $30 million in state transitional aid to help make up for a projected $40 million budget shortfall. He said he revised the figure to $20 million in needed state aid after being told $10 million of the shortfall could be paid back over five years instead of one.
Other financially distressed New Jersey cities have received similar aid in the past, according to DCA records, including Paterson for $23 million and Trenton for $22 million. Cities that are struggling financially and are under a state fiscal monitor can apply for the aid.
"We know Atlantic City has a real need for assistance in light of the extraordinary impact of [casino] tax appeals," Lisa M. Ryan, spokeswoman for the department's Sandy Recovery Division, said Thursday in an e-mail. "Their application, like all others, will be reviewed on the merits.
"While we can't prejudge their application, we are confident they will be eligible for some level of assistance," Ryan said.
Since taking office Jan. 1, Guardian - the city's first Republican mayor in 23 years - said, he has met with executives at nearly all of the casinos to discuss their property-tax assessments.
"The casinos need a fair and equitable way to get their properties assessed," he said in an interview Wednesday night. "Tax appeals don't make a whole lot of sense. They just push the difference that [casinos] receive to all other casinos and residential properties."
Guardian said that a citywide tax reevaluation would take place most of this year and next, but that its findings would not take effect until 2016. He said he has reached agreements with most of the casinos to not appeal their property taxes over the next two years.
The mayor is required in the state-aid application to list changes the city is undertaking this year to reduce the cost of government. He mentioned some Wednesday, including a hiring freeze on existing positions, a halt to promotions, a consolidation of services - such as replacing trash trucks with ones with automatic arms - and using other taxes, such as the hotel or wage tax, to cover public-safety expenses.
"Atlantic City has a very good case for the transitional aid ... to offset the decrease in tax revenue," said Assemblyman Vincent Mazzeo (D., Atlantic), who introduced a bill last month to streamline Atlantic County's property-tax system. "We should have maybe done that last year, but applying for it this year is a very good thing. The situation the city is in is due to a lot of competition, and, of course, the [gaming] revenues aren't where they were in 2006."
Gambling revenue here began tanking in 2007 because of casino competition from Pennsylvania and New York. That same year, Atlantic City casinos began appealing their property taxes.
The financial front isn't getting easier. In January, the Atlantic Club casino shut its doors, unable to find a buyer who would keep it operating. That left the city with 11 casinos and one less major taxpayer.
Figures released Wednesday by the New Jersey Division of Gaming Enforcement showed gambling revenue was down 6.2 percent year to date compared with a year ago - even with online gaming's debut Nov. 26. The casinos reported $10.3 million in revenue from their online operations in February, up from $9.5 million in January but still much lower than expected by analysts and Gov. Christie.
The governor, in signing the I-gaming bill into law in February 2013, initially anticipated a $1.2 billion industry in its first full year. Christie has revised his estimate to $225 million annually.