Atlantic City faces state takeover with city government burdened by debt

ATLANTIC CITY, N.J. - New Jersey Gov. Chris Christie said Tuesday the state will assume vast control over Atlantic City's finances and decision-making, saying the seaside gambling resort is incapable of getting its finances together after years of overspending.

See Full Article

Christie, a Republican presidential candidate, was joined by the Democratic leader of the state Senate, who has already introduced a takeover bill, and the Republican mayor of Atlantic City, who reluctantly went along with the plan.

"Atlantic City's government has too much debt and it's too expensive to run for the tax base it has," Christie said. "Atlantic City's finances are now the greatest threat to the city's well-being. The urgency of the city's current financial predicament cannot be overstated."

Christie and Senate President Steve Sweeney said the takeover bill in the Legislature will be amended to incorporate elements of a financial assistance package the governor vetoed last week. That includes a provision to let the city's eight casinos make payments in lieu of taxes and prohibit them from appealing their taxes.

"We have to fix this government," Sweeney said.

The legislation, which must be approved by the state Legislature, will also let the state negotiate to restructure municipal debt, give it the right to cancel collective bargaining agreements, and sell off city assets and land.

Mayor Don Guardian, who initially opposed a takeover, said Tuesday he decided to accept the state's help.

"It's time for some tough decisions and some pain as we move forward," he told reporters at a Statehouse news conference.

Hours later, the City Council voted 9-0 to "join negotiations on a new partnership bill," Councilman Jesse Kurtz said. The council had intended to vote on whether to ask the state for permission to file for bankruptcy.

Christie called for the legislation to be introduced and passed before the end of February, and he made a rare promise in advance to sign it. The state takeover would last five years instead of the 15 envisioned in the original legislation.

Assembly Speaker Vincent Prieto, a Democrat, said he has serious concerns about the state being given the right to cancel collective bargaining agreements. Prieto, who was not at the news conference, also cautioned Christie and Sweeney not to ignore him.

"If the Assembly is not involved, then there is no agreement," he said.

The cash-strapped city has been pondering whether to ask the state for permission to declare bankruptcy - a request that appears less likely to be granted in light of the takeover plan. The City Council was to discuss a bankruptcy filing Tuesday afternoon, but cannot actually make a filing without state approval.

The struggling seaside gambling resort is still reeling from Christie's veto of a financial aid package, $160 million in tax appeals from its top casino and the continuing slowdown of its casino industry.

Christie has long been critical of Atlantic City's municipal government, saying it spends far more than it takes in and repeatedly turns to the state for bailouts.

Guardian, entering his third year in office, says his administration has co-operated with Christie in making painful budget cuts and is willing to do more.

Atlantic City's budget woes have been exacerbated by the cratering of its casino industry. In 2014, four of its 12 casinos went out of business. And many of the remaining casinos have successfully appealed their property taxes, convincing a tax court that they are worth less in a diminished market than they were when times were better.

Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.56 billion last year.



Advertisements

Latest Economic News

  • Online calls to #BoycottSearsCanada over treatment of ex-employees

    Economic Toronto Sun
    TORONTO — Sears Canada is facing a social media campaign calling for a boycott after the company said it planned on paying millions in bonuses to keep executives on board during restructuring, despite not offering severance to laid-off workers. Source
  • Sears Canada faces online calls for boycott over treatment of ex-employees

    Economic CTV News
    TORONTO - Sears Canada is facing a social media campaign calling for a boycott after the company said it planned on paying millions in bonuses to keep executives on board during restructuring, despite not offering severance to laid-off workers. Source
  • BBC women demand immediate response to gender pay gap

    Economic CTV News
    LONDON -- Some of the BBC's most prominent female journalists and TV presenters are banding together to demand that the broadcaster fix its wide gender pay gap immediately rather than in several years as management has proposed. Source
  • New airport security rules and brewing beer battles: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Here's the consumer news you need to know from CBC-TV's Marketplace. Get this in your inbox every Friday. Sign up here. Flying to the U.S.? Read this "Enhanced" security measures went into effect this week for Canadians travelling to the U.S. Source
  • Credit agency pushes feds to give it access to list of social insurance numbers

    Economic CTV News
    OTTAWA -- An international credit reporting agency is pushing the federal government to give it access to a monthly list of new social insurance numbers despite years of rejections over privacy concerns. TransUnion made the request anew earlier this year, shortly after Patty Hajdu became labour minister, to access the list that contains the range of social insurance numbers issued each month in various regions of the country. Source
  • Canadians set record with U.S. real estate shopping spree

    Economic CBC News
    New Brunswick's Joel Levesque had no idea he was helping set a record when he bought a home in Fort Myers, Fla., back in April. The 63-year-old semi-retired public affairs professional wanted a place to escape for the winter and didn't feel like waiting around for the loonie to gain ground on the greenback. Source
  • Debt got you down? Start a debt-destruction club

    Economic CBC News
    If you run, hide, or plug your ears every time the topic of money comes up, you're not alone. But as the era of ultra-low interest rates comes to an end, you need to force yourself to face your finances. Source
  • Ontario transit agency won't let Bombardier bid to operate commuter trains

    Economic CTV News
    MONTREAL -- Ontario's transit agency has decided not to appeal a court ruling favouring Bombardier but will exclude the Montreal-based company from bidding to continue operating GO Transit trains as it has done for decades. Source
  • Business groups blast Ontario labour proposals on last day of consultations

    Economic CTV News
    TORONTO -- Unions and advocacy groups made one last effort Friday to sway the Ontario government on its plan for sweeping changes to the province's labour laws, with some sounding the alarm about what they deem drastic measures and others arguing the proposal doesn't go far enough. Source
  • Marijuana companies band together to develop marketing guidelines

    Economic CTV News
    TORONTO -- Sixteen of Canada's licensed marijuana producers have enlisted the help of Advertising Standards Canada to develop guidelines on how the drug should be branded and promoted before its recreational use becomes legal next year. Source