On appeal from the Final Action of the Treasury Department of the State of New Jersey.
Bischoff King and Polow. The opinion of the court was delivered by Bischoff, P.J.A.D.
The issue presented by this appeal is whether the proceeds from the investment of the "Casino Revenue Fund" should be credited to that Fund or to the General Treasury. We hold that the investment income should be credited to the Casino Revenue Fund.
This matter originated as an action in lieu of prerogative writs. The complaint alleged that the State improperly fails to apply interest earned on receipts of the tax imposed by N.J.S.A. 5:12-144 on casino operations to the purposes for which casino tax revenues are allocated by N.J. Const. (1947), Art. IV, § VII, par. 2 D, and N.J.S.A. 5:12-145. An answer was filed denying any legal requirement that the investment earnings on casino tax receipts be applied to the purposes for which the receipts themselves are allocated. The answer also asserted that jurisdiction over the dispute properly belonged in the Appellate Division under R. 2:2-3(a) because the action essentially sought a review of the action of the State Treasurer. The trial judge agreed with the latter contention and transferred the matter to this court.
The constitutional authorization for casino gambling in Atlantic City appears in N.J. Const. (1947), Art. IV, § VII, par. 2 D, which as adopted in 1976, provides in pertinent part:*fn1
D. It shall be lawful for the Legislature to authorize by law the establishment and operation, under regulation and control by the State, of gambling houses or casinos within the boundaries, as heretofore established, of the city of
Atlantic City, county of Atlantic, and to license and tax such operations and equipment used in connection therewith. Any law authorizing the establishment and operation of such gambling establishments shall provide for the State revenues derived therefrom to be applied solely for the purpose of providing reductions in property taxes, rentals, telephone, gas, electric, and municipal utilities charges of eligible senior citizens and disabled residents of the State, in accordance with such formulae as the Legislature shall by law provide. The type and number of such casinos or gambling houses and of the gambling games which may be conducted in any such establishment shall be determined by or pursuant to the terms of the law authorizing the establishment and operation thereof.
Acting pursuant to the authority conferred on it by the constitutional amendment, the Legislature adopted the Casino Control Act, L. 1977, c. 110, N.J.S.A. 5:12-1 et seq. This statute establishes a comprehensive plan of regulation for the casino industry. As part of this scheme of regulation there was created the Casino Revenue Fund:
5:12-145. Casino revenue fund
a. There is hereby created and established in the Department of the Treasury a separate special account to be known as the "Casino Revenue Fund," into which shall be deposited all revenues from the tax imposed by section 144 of this act.
b. The commission shall require at least monthly deposits by the licensee of the tax at such times, under such conditions, and in such depositories as shall be prescribed by the State Treasurer. The deposits shall be deposited to the credit of the Casino Revenue Fund. The commission may require a monthly report and reconciliation statement, to be filed with it on or before the 10th day of each month, with respect to gross revenues and deposits received and made, respectively, during the preceding month.
c. Moneys in the Casino Revenue Fund shall be appropriated, notwithstanding the provisions of P.L.1976, c. 67 (C. 52:9H-5 et seq.), exclusively for reductions in property taxes, rentals, telephone, gas, electric, and municipal utilities charges of eligible senior citizens and disabled residents of the State, as shall be provided by law.
Since the establishment and operation of casino gambling, substantial revenues have been received from the tax imposed thereon. The record does not indicate the amount. The moneys thus collected have been placed in the General Revenue Fund by the Legislature but segregated therefrom. Interest derived from the investment of these funds has been added to the General Revenue Fund, but not so segregated.
Edward Hofgesang, Director of Budget and Accounting for the Department of the Treasury, filed an affidavit in connection with these proceedings in which he stated that the Casino Revenue Funds are treated identically to the property tax relief fund, and he described the procedure for the accounting of the property tax relief funds in the following terms:
6. The revenues derived from the Gross Income Tax (N.J.S.A. 54A:1-1 et seq.) which are allocated to local property tax relief by Article VIII, Section I, paragraph 7 of the State Constitution are accounted for in the Property Tax Relief Fund, established by N.J.S.A. 54A:9-25 as a special account with the State Treasurer. The revenues so derived are separately stated from all other revenue, within the Treasury's General Fund. Any appropriation not specifically made payable from other sources is paid from monies held in the General Fund. At any given time, disbursements from the General Fund to pay appropriations for constitutionally eligible purposes of property tax relief directly chargeable to the Property Tax Relief Fund may either exceed the revenue credited to it, or revenues may exceed disbursements. Rarely, if ever, are they equal. No interest or other earnings are credited to the Property Tax Relief Fund from the General Fund. Maintenance of the Property Tax Relief Fund as a separate account within the General Fund facilitates the satisfaction of ...