Atlantic City makes partial payment to school district

ATLANTIC CITY, N.J. -- Cash-strapped Atlantic City has made a partial payment to its schools system as it tries to prevent a judge from freezing the little amount of money it has on hand.

But the state Department of Education, which is suing to force the city to pay its entire debt, isn't satisfied. The city still owes the schools about $30 million in taxes it will have collected for them by July 15.

Last week, a judge refused the state's request to prevent Atlantic City from spending any more money until it pays the school system what it owes.

The city is on the verge of running out of money, due in part to the shrinking of its casino industry, which is by far its largest taxpayer. In 2014, four of the city's 12 casinos shut down.

Mayor Don Guardian said the city paid the school system $4.25 million of the $8.4 million it owed the schools.

"We are in constant communication with the school district and they understand our situation," Guardian said. "The state is fully aware of these actions. We have always made, and will continue to make, payments to the school district as one of our top priorities."

But David Saenz, a spokesman for the Department of Education, said Thursday's payment is only half of what was due in March, and that nothing from an April payment has been paid yet.

A court hearing on the situation is set for next Tuesday.

School board president John Devlin said the partial payment will keep schools open for now.

"We fully understand and appreciate the difficult financial position the city of Atlantic City is in today," he said. "Yesterday's payment was a day early, and we are thankful for their contribution."