Steve Sweeney, New Jersey Senate President, has devised plans for Atlantic City casinos to help re-energise the region.
A new scheme would see casinos pay a tax of $150m annually over a two-year period to the municipal government.
The Casino Reinvestment Development Authority would also direct up to $30m to cover city debt payments.
Unspecified cuts of $72m would have to be made by local schools as well as the municipality.
"This is a message that we’re focused on what’s wrong with Atlantic City first; that its structure is too expensive.” Sweeney said.
“We’re going to fix that first, and then, as we bring new entities and interest into the city, what’ll happen, is, they’ll prosper. But they won’t prosper if they can’t make money in the city.”
Atlantic City was previously the second biggest source of gambling in the world, but has struggled in recent times, with the Trump Taj Mahal becoming the area's fifth casino to announce its closure this year.
A summit regarding the future of the city is being held on Wednesday, where Governor Chris Christie will be in attendance, with the potential legalisation of sports betting in New Jersey on the agenda.
The Sports Wagering Act, which would see casinos and racetracks able to offer sports-betting in the state, has been delayed from being implemented after the four major sports leagues and NCAA (National Collegiate Athletic Association) were granted a restraining order against the bill.