New Jersey Decides To Take Over Atlantic City Finances Inspite Of Local Council Protests

The casino industry in Atlantic City used to generate a significant amount of revenue and also provide thousands of job opportunities. The casino industry has struggled during the last 24 months due to a slowdown in Atlantic City’s economy and also due to the competition from casinos in neighboring states.

As a result, four out of Atlantic City’s twelve casinos were forced to close their doors during the last 24 months and thousands of casino workers suddenly found themselves out of work. Atlantic City’s revenue also dropped as a result of this gambling industry slump and there are concerns that the casino industry might take a long time to recover.

atlantic city casinosThe state of New Jersey has decided to implement a new plan to help Atlantic City recover and pay back its growing debt. The New Jersey Governor has proposed a new plan that will give the state more control over the Atlantic City’s finances, enabling it to avert bankruptcy. This new plan has been criticized by the city council as being “an assault on local rule.”

The plan was revealed in a press conference in Trenton which was attended by Mayor Don Guardian and Senate President Stephen Sweeney. Just short of a complete takeover, the new arrangement puts the state in charge of all the city’s operational decisions including “restructuring debt, contracts and consolidating services”.  Atlantic City now has an outstanding debt of $240 million and owes over $150 million in tax appeals to its casinos. The city is expected to run out of money by mid-2016 according to a recent assessment of its finances.

Mayor Guardian had earlier said the city had only four options to bail itself out of this situation. Atlantic City could remain silent and do nothing, submit to a takeover, file for bankruptcy or cede more authority to the state and collaborate with it. The mayor had advocated bankruptcy in order to protect the city from creditors, but Gov. Christie has stated that this step should be a last resort.

The Democratic-controlled city council met hours after the new plan was announced to discuss the possibility of bankruptcy. During the meeting, the council heard a presentation from Richard Trenk, a lawyer from West Orange, New Jersey who has represented the city earlier and shed light on the basics of a municipal bankruptcy. The council also heard from residents of the city, many of whom made it clear that they were against a state takeover.

New Jersey state legislators are also looking at the possibility of approving two new casinos that could be built outside of Atlantic City in order to deal with the competition from outside states, a proposal that is opposed by Atlantic City casinos as they feel opening new casinos outside of Atlantic City will further damage the revenue opportunities of Atlantic City’s casinos.