Gov. Phil Murphy is set to decide on a bill that would extend the 2016 state takeover of Atlantic City for another four years.
Should he approve the measure sent to his desk on June 21, then the state would continue its control of most major functions of the struggling seaside resort’s government operations for a total nine years.
State officials pushed the takeover through in 2016 under then-Gov. Chris Christie, a Republican. At the time, the closure of five of the city’s 14 casinos – coupled with waist-deep debt – helped push Atlantic City to the brink of financial ruin. The takeover allowed the state to hire and fire employees, negotiate union contracts, sell off city assets and nix any city council decisions.
Under the Murphy administration, state and local officials contend that the relationship with the 39,000-resident city is more of a collaboration than a top-down approach.
“There’s no doubt in my mind, because the state’s involvement is still needed here,” Lt. Gov. Sheila Oliver said in an October interview. “The state still needs to be a partner with the city.”
Oliver heads the state Department of Community Affairs, which formally oversees Atlantic City’s functions. State officials were initially looking at ending control this year, under what was initially a five-year agreement.
“If it’s going to happen, I’m not going to fight it this time because it’s truly a partnership,” Atlantic City Mayor Marty Small said in an October interview. “We do need the state’s resources financially and otherwise.”
Road to recovery
Atlantic City’s finances have rebounded since the Great Recession, and the cascade of financial woes that befell the city for much of the past decade. Several Wall Street rating agencies, which historically have given Atlantic City junk bond status, said they’ve been impressed with the city’s recent track record.
In December, Moody’s Investors Services reported it has “expectations that, despite the pandemic, Atlantic City will continue making strides in improving its governance and finances.”
City and state officials have tried to diversify the local economy beyond gambling into sectors such as higher education, health care and energy.
Stockton University opened an Atlantic City campus, and roughly 1,100 megawatts of offshore wind energy will be generated at sites just off the city’s coastline. But with the economy still heavily reliant on the casinos and the surrounding hospitality, entertainment and dining industries, the city’s unemployment rates became some of the highest in the nation last year at the height of pandemic-related business closures.
Nonetheless, the proposed Assembly Bill 5590 gives some autonomy back to Atlantic City’s government.
For example, it restores key job protections for workers and gives them back civil service status, which allows those workers to file grievances.
“Atlantic City is on the road to recovery,” said one of the bill sponsors, Senate President Stephen Sweeney, D-3rd District. “City officials have made a lot of progress by working in partnership with the state.”
“This bill will help protect the city’s public workers as we work toward the day Atlantic City’s operations are once again under local control,” ranging from police officers, firefighters and other public workers, Sweeney said.