After almost five years of piecemeal efforts to fix Atlantic City, New Jersey’s distressed seaside resort faces more drastic measures: the end of its casino monopoly and a state takeover or bankruptcy filing.
On the line is the future of a city that Governor Chris Christie once said was crucial to New Jersey’s recovery. Once the second-largest U.S. gambling market, Atlantic City has seen its key industry crumble as day-trip patrons shift to newer, closer casinos in nearby Pennsylvania and New York.
The decline has sapped municipal tax collections. While state aid helped plug a gap this year, the city of 39,000 faces a shortfall of $90 million next year, a third of its budget. The dire straits have led New Jersey officials to bring to the forefront options that have been discussed for months, if not years. The new initiatives spurred a rally for the city’s debt.
Lawmakers this week agreed to ask voters in November to expand gambling to northern New Jersey and share the revenue with Atlantic City. They’ve also proposed taking control of its finances for 15 years. Senate President Steve Sweeney, the highest-ranking Democratic legislator, said the city should declare bankruptcy if the takeover isn’t approved quickly.
“This is a very clear statement to Atlantic City: Get your act together, knock off the B.S. and start addressing what you need to address,” Sweeney told reporters Tuesday at the Statehouse in Trenton. “The state is not going to come in and bail you out any more. You need to fix this.”
An emergency manager appointed by the governor a year ago to oversee Atlantic City’s finances released one report in March and “no substantive subsequent updates,” S&P said in December. This month, the state Senate sent Christie legislation that would divert some gambling funds to the city and establish fixed payments from casinos instead of levies based on real estate values to prevent tax appeals that have strained the city’s finances.
On Tuesday, Sweeney said more must be done. He, Sarlo and Senator Kevin O’Toole, a Republican from Cedar Grove, announced plans to introduce legislation to give control of city finances to the state’s Local Finance Board. While about 15 municipalities get some state oversight, including Atlantic City, the last to lose total authority was Camden, from 2002 to 2010, according to his office.
Atlantic City, Sweeney said in a statement, has a “bloated” budget that amounts to $6,717 per person. That figure is $2,736 for Newark, New Jersey’s largest city, and $1,953 for Camden.
Ernest Coursey, a county lawmaker who represents Atlantic City, said the Camden takeover failed to produce results, while control over Newark’s public schools has led to few improvements.
“It will be a cold day in hell before we just stand by idly,” Coursey said at the Guardian press conference. “Everything the state touches turns to crap.”