Atlantic City agreed Tuesday to let state officials take control of the city's troubled finances to help it get back on its feet and avoid crushing tax increases that otherwise would have had to be passed on to residents and businesses.
It's Gov. Chris Christie's second major move to assume greater control in Atlantic City, whose 11 casinos have been reeling from a nearly four-year revenue plunge set off by competition in neighboring states and the continuing poor economy. Earlier this year, Christie announced plans to set up a special casino and tourism district in Atlantic City overseen by the state.
"Atlantic City is at a crossroads where its revitalization and future as a resort destination are now taking shape," the Republican governor said of the overwhelmingly Democratic city. "This is not the time, nor is it the right message to be sending, for Atlantic City to be imposing burdensome tax increases on its citizens and business community.
"We want to help Atlantic City through this difficult period, but we also want the city to improve and maximize its management and fiscal policies so it is best positioned for revitalization and long-term prosperity," Christie said.
Atlantic City elected officials sought to portray the move as help from the state rather than an outright takeover, even though the state retains ultimate control over the city's finances.
"We welcome this partnership with state government in what we are trying to accomplish for our city," Mayor Lorenzo Langford said. "The governor can help us to convey to the rest of New Jersey all the progress we are making to improve the management of our city to pave the way for a brighter future."
The arrangement will allow the city to gradually close its $9.5 million budget deficit over five years, sparing residents and businesses a significantly larger property tax increase this year. The state's Local Finance Board voted Tuesday to approve bonding to pay for Atlantic City's tax appeals.
Under the agreement, city officials reduced a previous request to exceed the state property tax cap by nearly $10 million to just over $2 million instead.
Had the higher waiver been approved, city taxpayers would have been hit with an average increase of $253. The lower waiver means that increase will now be $157.
Other benefits of state supervision include allowing the city to defer some expenses. The state may also provide staff and resources to help the city with its finances.
The municipal budget up for a vote Wednesday night is about $216 million.