AC Financial Rescue Legislation Nears Enactment

On May 27, 2016

If Governor Chris Christie signs the legislation that was sent to him yesterday, Atlantic City will have five months to develop a balanced 2017 budget, while implementing cost-cutting measures over a five-year period. After months of wrangling, the State Assembly and Senate passed the two financial bills that avoid an immediate state takeover of the city. If a sound cost-cutting solution is not presented within 150 days, the state would take control of the city’s government and finances.

The bills, which were approved by wide margins, are a compromise between a plan supported by Governor Christie and Senate President Stephen Sweeney and one supported by Assembly Speaker Vincent Prieto. Sweeney’s plan called for an immediate takeover of the city, while Prieto’s plan would have given Atlantic City up to two years to correct its financial problems. The Speaker’s plan also would have protected the collective-bargaining rights of city workers.

The legislation calls for Atlantic City to receive a $75-million loan from the state: a $30 million loan for the remainder of 2016; $30 million for leftover 2015 debt; and $15 million for 2017 debt. Casinos would also be able to give the city $120 million each year under a 10-year payment –in-lieu of taxes agreement.

In an editorial he wrote for the Star-Ledger, Prieto said, “The Atlantic City compromise bill was worth the time and effort. This bill, while not perfect, is much better than when we started. No one individual or one branch got everything they wanted.”

Atlantic City Mayor Don Guardian was at the State House yesterday to show his support of the legislation.

Meanwhile, Christie said on NJ 101.5 radio that the legislation gives him the authority he still needs to fix the city’s finances if local officials fail to correct its fiscal issues.

Atlantic City’s current financial troubles began in 2014, with the closing of four casinos, which accounted for about 70 percent of the city’s tax revenue. Three casinos have since filed for Chapter 11 bankruptcy protection, including Caesar’s, Bally’s and Trump Taj Mahal.

Related Articles: