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April 08, 2016

As N.J. Assembly battles Christie, judge won't freeze Atlantic City assets

Despite perilous state of municipal finances, Atlantic City averts shutdown

Atlantic City fulfilled its monthly payroll obligations Friday after a judge declined to freeze the city's assets, averting a shutdown of nonessential services that had been anticipated by Mayor Don Guardian since late March.

RELATED ARTICLE: Atlantic City runs out of cash, keeps working, worrying – and wondering

According to the Press of Atlantic City, a judge ruled that municipal employees must be paid as scheduled despite the perilous state of the city's finances.

The decision comes as the New Jersey Assembly battles Gov. Chris Christie over a proposed state takeover of large parts of Atlantic City's government, including the right to renegotiate public-employee contracts.

Mayor Guardian and Assembly Democrats, led by Speaker Vincent Prieto, oppose the state takeover and convened this week to work out a rescue bill that would give the city a two-year window to reach its goals before the state can assume control, reports.

Governor Christie has called the compromise bill, approved Thursday by the Assembly's judiciary committee, a "completely ineffective solution" that he'll refuse to sign. Prieto, for his part, has vowed not to bring Christie's Senate-approved state takeover bill to a vote on grounds that it overrides collective bargaining rights.

Prieto's bill would establish an Atlantic City Planning Committee to oversee a five-year plan to restore the city's finances, which have been depleted in part by the closure of four of the gambling hub's 12 casinos in the past year. The bill would incorporate binding elements of the PILOT proposal, a plan that calls for casinos to make adjusted annual payments over a 10-year period in lieu of taxes. 

Christie vetoed the PILOT plan in January, arguing that it would shift resources without requiring accountability from those who received and benefited from the funds.

Earlier this week, the state filed a lawsuit to prevent Atlantic City from making payroll payments because the city owes its own school district more than $30 million. In total, Atlantic City has nearly a quarter of a billion dollars in municipal bond debt, owes the Borgata $150 million in property tax refunds and has overall debt obligations of approximately $400 million.

Christie – who is joined by N.J. Senate President Stephen Sweeney in support of a state takeover – has linked Atlantic City's resistance to an approaching referendum on the prospect of expanding casinos to North Jersey. If Atlantic City doesn't bring the state takeover bill to a vote, Christie said in March that he will lobby against the November ballot issue.

In a recent poll, a slim majority of New Jersey residents opposed a state takeover of Atlantic City. As for expanding casinos to North Jersey, a Fairleigh Dickinson PublicMind poll conducted in January found that 50 percent of New Jersey residents oppose casinos outside Atlantic City, while 42 percent are in favor. 

Atlantic City is next scheduled to make payroll payments on May 6.