Senate Budget and Appropriations Committee voted Thursday 9-1-3 in favor of advancing a bill that would allow for a state takeover of Atlantic City’s finances.Local leaders and residents were in attendance to push back on the bipartisan measure, which is backed by Senate President Steve Sweeney (D-West Deptford) and state Sens. Kevin O’Toole (R-Wayne) and Paul Sarlo (D-Wood-Ridge).
Under the legislation, the state will assume greater power and responsibility in the restructuring of the city’s finances for a five-year period.
Bill sponsors say that currently, the city owes bondholders more than $500 million and more than $150 million in tax appeal debt.
“This is a pathway to creating an efficient, accountable and transparent Atlantic City Government,” O’Toole said. “Taxpayers from Bergen County to Cape May have sent hundreds of millions of dollars to Atlantic City in recent years, and this is a step allowing us to protect those investments. This intervention will expedite the city’s evolution into a new prime-time destination for people on the East Coast and beyond.”
“We have to bring responsible financial management and practices to Atlantic City. State intervention is a better choice than allowing the city to go into bankruptcy,” Sarlo added. “Under bankruptcy, all the decisions would be imposed by a bankruptcy judge. This plan gives the city and the state a voice and a role in making the decisions that will impact the lives of the residents and the future of Atlantic City.”
In a companion bill, the committee also approved a measure that would allow for Atlantic City’s casinos to make payments in lieu of taxes to help pay down the city’s debt over a 10-year period.
“One of the most important priorities is to protect local taxpayers from bearing the cost of declining revenues caused in large part by the multiple casino closings,” Sweeney said. “The PILOT plan will bring more reliability in local revenue and more predictability for the casinos.”
But despite the bills seemingly having the support of Gov. Chris Christie, there is some doubt as to whether or not they will ever reach his desk since Assembly Speaker Vincent Prieto (D-Secaucus) has said that the legislation may compromise existing union contracts.
While Mayor Don Guardian appeared to have agreed to terms on a takeover with Christie and Sweeney in January, he has since taken a hard stance against the plan.
The measures will now head to the full Senate for a vote.