New Jersey state board takes control of ailing Atlantic City
The state of New Jersey moved this week to take control of Atlantic City, having lost patience with the financially troubled gambling resort’s inability to pay its bills.
Over the objections of Atlantic City’s elected officials, the Local Finance Board in Trenton, the state capital, unanimously approved a five-year state takeover to stave off a bankruptcy filing by the city. The decision would give the head of the finance board the power to sell municipal assets, renegotiate union contracts and fire city employees.
“It’s an incredible responsibility, one that I’ve lost sleep over the last few weeks,” Timothy Cunningham, the head of the finance board, told reporters, according to the Associated Press. “I’m sure I’m going to lose sleep tonight.”
It was not clear what authority the city’s Republican mayor, Donald Guardian, or its elected council would retain. Guardian said before the vote that the city would go to court to challenge a takeover.
Atlantic City has sunk deep into debt as much of its lifeblood, the money that gamblers lose at its casinos, has been drained away by neighboring states that have legalized gambling in recent years. Three years ago, Atlantic City had 12 casinos, but five of them have shut down as the industry’s annual revenue has been cut in half in the last decade.
The state had ordered the city to submit a fiveyear plan for solving its financial problems. But last week, the commissioner of the state Department of Community Affairs, Charles Richman, rejected that plan, concluding that the city was “not likely to achieve financial stability” without raising taxes or taking more drastic actions.
The city has few assets that it could sell to pay down its $500 million of debt.