Homeowners in Atlantic City say they are experiencing sticker shock over soaring property tax bills.

Homeowners now owe an average of nearly $700 per year more, thanks to increases in school and county taxes. The city and state say the increases may bring "pain and hardship to some homeowners."

“This is the mess we got,” says city resident David Logan. "What it's going to do is send a lot of people out of Atlantic City."

County Executive Dennis Levinson says the reason for the increase starts with the casinos and ends with the state.

"We don't run the Atlantic City government. The state runs the government in Atlantic City. And by the way, they have a state monitor in Atlantic City in the school board,” Levinson says.

Levinson says that over the years, casinos battled Atlantic City for lower property taxes. The county credited the city for millions in disputed taxes.

"It was a false sense of security Atlantic City had all those years,” he says.

A new 10-year agreement between the casinos and the city caused the casino tax appeals to stop. The county’s credit to the city went from $7.2 million last year, to just $300,000 this year.

"You get comfortable. You figure it's never going to end. Well, why wouldn't it end?” says Levinson.

Atlantic City resident Bill Terrigino lives in the shadow of the Ocean Resort casino. He says he has seen it open as Revel, close and now reopen. He says he’s OK with the higher taxes.

“I'd rather have it than getting thrown out of the house,” he says. “You don't own anything in Atlantic City or basically in the United States. They just let you pay the taxes.”

Atlantic City officials say that the city will be issuing residents information about property tax relief initiatives like the New Jersey Senior Freeze program.