Christie backs state financial takeover of Atlantic City
The financial future of Atlantic City has taken yet another turn, after New Jersey Governor Chris Christie backed plans for the embattled city’s finances to be run by the state for the next five years.
Atlantic City’s council passed a resolution earlier this week to support the new proposal, which has also been backed by New Jersey state Senate President Steve Sweeney and Atlantic City Mayor Don Guardian.
The state already has control over the city’s budget, hiring and other finances, but fiscal powers will be extended under the new agreement. The deal, which Governor Christie is hoping will be implemented by February, will include new powers to restructure city debt, terminate municipal contracts, dissolve city departments and sell city assets, all of which have been proposed as solutions to the mounting debt crisis.
Much of Atlantic City’s financial crisis has been blamed on the decline of the city’s flagging casino industry, which has seen its revenue halve from $5.2bn to $2.6bn in the past decade and four casinos permanently close in 2014, costing the city hundreds of millions in tax revenue over the period. Atlantic City is currently $240m in debt and owes and additional $160m in tax appeals to the Borgata, in a legal case that is still ongoing. Projected deficit over the next five years also currently exceeds $300m.
With rival casino industries across state borders continuing to bite chunks out of Atlantic City revenue, declaring bankruptcy is still an option, although it is one Christie in particular is adamant about steering clear from.
Detractors of filing for bankruptcy are quick to state that taking that option won’t help the city attract investors in the long run, but with ratings agencies having already slashed the city’s credit rating to CCC-, declaring bankruptcy might not make much of a difference.
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