Atlantic City Close to Bankruptcy?
Legislature at Atlantic City, New Jersey, have been struggling to agree on a policy to try and rescue the city from the brink of bankruptcy; with four out of their twelve casinos that have faced closure a couple of years ago, the city is still struggling to gain back their financial footing. The President of the New Jersey Senate, Stephen Sweeney, warned that the famous seaside resort town could go bankrupt very soon if law makers cannot put aside their political differences and focus on the rescue plan; at the moment, the NJ State Assembly is getting ready for a vote on an Atlantic City rescue plan that challenges Sweeney’s proposal.
The seaside town, famous now for their east coast gaming facilities, was incorporated in the late 19th century. The city went through a boom period in the early 20th century with the construction of many hotels and resorts and had seen a lot of economic ups and downs until gambling was legalised in the late 1970s, when Atlantic City shot to being the most popuar tourist destination in the country. Later with the revitalisation of Las Vegas and development of other gaming venues on the East Coast, Atlantic City started to lose some of its appeal; finally, during the great recession of the 2008, the city suffered a great economic downturn; four casinos — The Atlantic Club, Showboat, Revel and Trump Plaza closed in 2014 and along with it, the city lost 8,000 local jobs. The eight surviving casinos, however, saw an increase in their operating profits, which seems to be a better fit for the smaller market; they said, eight casinos was the right-sizing of a market and that before, they had too many casinos and not enough customers to fill them.
Governor Chris Christie
Lawmakers have been divided over how to help the Atlantic City’s financial situation, with the closure of the casinos and the loss of jobs in the thousands, the tax revenues have also plummeted. Sweeney and State Governor, Chris Christie, have been pushing for legislation that would allow the state to take over large portions of the local government for five years and aid the city’s revival.
Sweeney said, at a Statehouse news conference, “Leadership means making very tough decisions; not political ones.”
He also added, “We're out of time;” hoping to unify all the politicians involved.
The battle between Governor Christie, local officials and lawmakers over Atlantic City's future, has generated much curiosity and intrigue amongst residents and politicians alike; many theories have also been suggested regarding the matter.
Assembly Speaker Vincent Prieto
Assembly Speaker, Vincent Prieto, who has introduced his own plans to give the city two years to fix its financial problems, has scheduled a vote on Thursday.
Sweeney commented, “I don't think he has the votes to pass it; once it doesn't pass, then he should pass my bill. Otherwise, Atlantic City is going bankrupt. In fact, we're close to it now.”
The Senate President also added that even if the measures proposed by Prieto do pass, he would not put it up for a vote in the Senate because Christie would not sign it.
He asked, “What's the point of doing political theatrics?”
Prieto also mentioned in a statement, on Wednesday, that he is “not the one repeatedly talking about politics.”
He added, “This is all about policy, and the compromise bipartisan Assembly bill remains the right choice.”
Prieto reaffirmed, “I look forward to Thursday's voting session.”
Assemblyman Ralph Caputo
Assemblyman Ralph Caputo, who is in support of Prieto’s policy stated that the vote will be “razor-thin.” but he believes that the Speaker has enough support and if the bill passes then Sweeney would come to a compromise as well.
Sweeney responded by saying that he has offered two compromises so far; one that was declared in public and the other, which was discussed in private but Prieto shot down both the proposals. The policy that Sweeney proposed publicly, involved granting Atlantic City Officials 130 days to fix their issues and if they could not do so in the given time, then the takeover of the local government would commence as outlined in his bill.
Last Wednesday, he also disclosed that the policy he has suggested, to Prieto, in private, involved adding another 45 days to the initial proposal and granting city officials a full 175 days to get their financial situation under control.
Prieto's office denied ever receiving the second offer saying, Sweeney never made a second offer. Prieto himself also added that even if he had received the offer, he “wouldn't have considered it a serious proposal anyway.”
Mayor Don Guardian's
Sweeney said that Atlantic City may only be eight to ten days away from running out of cash. He also stressed that Moody's Investor Service, one of the Big Three credit rating agencies that provides international financial research on bonds issued by commercial and government entities, have also warned that more than another ten New Jersey municipalities, including Paterson, Newark and Trenton will see their credit ratings fall the if Atlantic City defaults on its debt or goes bankrupt.
This time, Sweeney blamed Mayor Don Guardian's administration for not taking enough measures to cut spending; the mayor scrapped a plan to lay off 195 jobs in city hall, last year, when the state Legislature passed an aid package, known as the PILOT bill, which would have allowed the city’s casinos to pay an annual lump sum in lieu of taxes; Christie later vetoed the bill, to try and squeeze a higher amount of taxes out of the casinos over the next few years.
The mayor said that Christie's administration promised the city the money.
Guardian also added, in a statement, on Wednesday that the city would still be in “tremendous debt” because of “legacy costs” and casino tax appeals even if he fired every employee in the city.
He said, “As any expert will tell you, we simply cannot cut our way out of this problem. We want a solution as much as anyone else, but we need a comprehensive solution to a problem that has been 30 years in the making.”
Jersey City Mayor Steve Fulop
Sweeney was also unhappy with Steve Fulop, the City Mayor for Jersey; he suggested on Tuesday that South Jersey Democratic power broker, George Norcross III, was influencing Christie on the issue.
He also accused Fulop of only getting involved in the issue because both Sweeney and Fulop are expected to run for the Democratic nomination for governor next year.
Sweeney added, “This is not about Atlantic City. This is about politics. The mayor should be staying in his own back yard. He's criticizing George Norcross for doing what he's doing. Look in the mirror.”