TRENTON, N.J. (AP) - Atlantic City pitched its financial recovery plan to state officials on Wednesday, warning that if Republican Gov. Chris Christie rejects it another big tax increase will hit residents whose taxes already have more than doubled over the last six years.
Republican Atlantic City Mayor Don Guardian, several City Council members and consultants who helped craft the plan presented it to a state Assembly panel two days after the council approved it.
The plan calls for selling land, laying off 100 workers, paying down most of the city’s $500 million debt and slashing other expenses during the next five years to fight off a threatened state takeover of its assets and decision-making power.
The state Department of Community Affairs has until Nov. 1 to accept or reject it. If the latter happens, officials warned, there would be more pain for residents who already have seen their taxes more than double since 2010.
“Plan B will be the tax increase that nobody wants,” said Joe Baumann, one of the city’s consultants.
Democratic Assembly Majority Leader Louis Greenwald cited “the fear that if Atlantic City collapsed, we would have a depression in south Jersey.”
In the years when Atlantic City’s casino industry continued growing, so did its municipal budget. But when in 2007 the industry began a decline, which continues unabated due to competition from casinos in neighboring states, the Great Recession and the devastating Superstorm Sandy, not enough money was rolling into city coffers to pay for its spending.
“When (casino) revenue was $5.2 billion and money was flowing, nobody said a thing,” Democratic City Council President Marty Small said. “But as soon as we got into trouble, Atlantic City became the Evil Empire. Our plan will check off all the boxes we were tasked with to make Atlantic City’s government more efficient.”
A community affairs department spokeswoman, Tammori Petty, said the plan is under review.
The city will use $110 million from the sale of the historic Bader Field former airport site and $105 million in bonds it will issue to pay off much of its massive debt, part of which was caused by successful tax appeals from casinos whose properties have lost tens of millions of dollars as the city’s gambling market shrinks. It also won substantial concessions from city unions.
The plan envisions a $103 million settlement with the Borgata casino resort, which is owed more than $150 million in tax refunds, but the city and the casino haven’t agreed on a deal.
Guardian said the plan would balance budgets for the next five years without raising municipal taxes and create a small surplus.
“With $500 million of debt and $100 million of shortfall in the current budget, if we could have solved this ourselves, we wouldn’t be coming before you,” the mayor told the panel. “We’re not asking for a bailout.”
Democratic Assemblyman John McKeon and Republican Assemblyman Chris Brown agreed the state originally was pushing for an immediate takeover. Each voiced hope the community affairs department will accept the city’s plan and allow it to continue to govern itself.
___
Follow Wayne Parry at https://twitter.com/WayneParryAC
Please read our comment policy before commenting.