Under a new proposal, Atlantic City has 130 days to devise a plan to fix its finances or the state takes over.
Proposed by Democratic State Senate President Steve Sweeney and others on Wednesday, the measure promises a state loan, provided a long-term plan can be devised by the city to increase revenue and hold down spending. However, it also gives Atlantic City a much narrower window to meet the requirements than a rival proposal in the state assembly that allows as long as two years before losing control to the state. Neither scenario seems likely to get the nod from Governor Chris Christie who has said repeatedly that that will only happen if the Senate has already approved a two-bill package.
On the verge of running out of money, a partial government shutdown was narrowly averted when a plan was devised to pay the city’s municipal workers every 28 days, instead of every two weeks giving lawmakers additional time to figure out a long-term solution to the city’s financial woes. Sweeney said that despite years of bold assertions by Atlantic City regarding its ability to solve the financial problem, “no solutions have ever been implemented in a material way. Our proposal gives the city one last chance,” according to the Associate Press.
Lawmakers said if approved, Atlantic City would have a period of 130 days during which time it would need to devise a reform plan where “financial stability” is achieved and implemented by lowering yearly spending to $3,500 per resident, about half what it currently spends, beginning on the first day of the month following the plans approval. If, however, the city fails to devise a plan approved by the state, 10 days later the provisions of the takeover legislation would go into effect. It has been noted by both Christie and Sweeney that the city’s 40,000-residents currently spend $6,7000 per resident, which is higher than larger cities like Jersey City and Newark. The proposed changes would be amendments to one of the two state takeover bills currently hung up in the state Legislature.
Legislation giving New Jersey control over the resort city’s finances and major decision-making power has been pushed by Governor Christie and Sweeney. Democratic Assembly Speaker Vincent Prieto, however, has his own bill that would allow the Jersey Shore gambling resort up to two years to improve its finances. Prieto said the state’s new proposal still fails to address his opposition to union contracts being allowed to be broken by the state and doesn’t protect the rights of the residents of Atlantic City. He said, “Those core concerns must be addressed for any proposal to be taken seriously.”
Gambling expansion in nearby states has upended the casino resort. That and the shrinking casino industry, which in 2006 was a $5.2 billion industry and last year fell to $2.56 billion, have lent to Atlantic City’s current fiscal crisis. Four of Atlantic City’s 12 casinos were shuttered in 2014. However, state officials say that decade’s worth of overspending and mismanagement have also contributed to the city’s predicament.