New legislation was revealed on Wednesday by New Jersey personnel to take over financial control over the next five years to rescue Atlantic City from becoming bankrupt.
Chris Christie, Governor of New Jersey, Stephen Sweeney, the Senate President and Don Guardian, the Mayor of Atlantic City got together and decided that state intervention was required to protect the fiscal viability of Atlantic City; the bill was introduced shortly after that.
An urgent case for Atlantic City
Atlantic City saw four (Showboat Casino, The Atlantic Club Casino Hotel, Trump Plaza and Revel) of its twelve casinos close in the last few years; together with increased competition from neighboring states caused the city’s tax revenues to drop to half.
Sweeney originally proposed a 15-year state takeover but is now looking at a shorter timeframe for the cooperative working agreement with the city. Given the state of the crisis in Atlantic City, he believes a more immediate and direct solution is required to reverse the issue.
The new bill looks to give the director of the state Local Finance Board more power to renegotiate the city's debt- dissolve and consolidate city agencies, share services with Atlantic County and sell city assets. The bill also offers Atlantic City a year to cash in on its $100 million water utility before the state uses it to generate funds for the city.
The next (quick) steps
It is not clear how quickly this proposal will be converted to law; the plan was introduced on Wednesday, it needs to be passed by the state Senate and Assembly before, with Christie’s signature, it becomes law in New Jersey.
Guardian said that Atlantic City could run out of money as early as the end of March and this new bill is the best hope for the city’s financial survival. He also added that if the legislation is not effective by then, they would have to file for bankruptcy.
Lawmakers also outlines a companion bill that was vetoes by Christie earlier in the year, which would have allowed casinos to make payments to the state instead of taxes for the next ten years, avoid wasting state funds on tax appeals and redirect extra funds to pay off debts.
The veto has cost them around $33.5 million and potentially pushed them closer towards an insolvency. In the case of a bankruptcy, a judge would decide the city’s future but the bill could allow the state to remain in charge of making policies that affect the local residents and businesses. State Senator Kevin O'Toole also added that the intervention could advance the city towards becoming an exciting destination for people on the East Coast and beyond.