State Takes Control of Atlantic City

NJ Spotlight News | November 9, 2016 | Politics
The state Finance Board unanimously voted to take over Atlantic City under the Stabilization and Recovery Act.

By Brenda Flanagan

“Atlantic City is my home, so I’m asking you to have some compassion,” said resident Linda Steele.

Atlantic City residents pleaded with the state’s Local Finance Board. Its unions worried.

“We don’t want the state to trample on our rights, to break our union contract and to set the labor movement in New Jersey back decades. And I would just urge restraint,” said Virginia Darnell, president of the White Collar Professional Association.

City officials admitted it faces a half billion dollars of debt, lost two thirds of its ratables and watched five casinos fold over the past couple years. But the mayor argued it just needs some help, not a draconian state takeover.

“Atlantic City is not going to fix itself by itself. We can’t cut enough funding out, we can not raise enough income other than taxes. It’s the partnership that we need,” Atlantic City Mayor Don Guardian said.

“You will disenfranchise the voters of Atlantic City who have given the people who they elected the authority to make those decisions,” Anthony Swan said.

The city’s elected officials today lost their argument, and lost control over their own municipality when the Finance Board unanimously voted to take over the gaming town under the Stabilization and Recovery Act.

“Our job is really not to look back and assign blame or try to present any criticism. It’s to look at the conditions forward, which is a really calamitous fiscal condition confronting the city right now,” said Dominic DiRocco from the Local Finance Board.

Meet Atlantic City’s new boss. 44-year-old Timothy Cunningham’s powers will supersede the mayor and council over the next five years and will include everything except the right to declare bankruptcy.

“The assumption of contracts, hiring and firing, collective bargaining issues. It’s an incredible responsibility and it’s one I’ve lost sleep over the last couple of weeks leading into and I’m sure I’m going lose a lot of sleep over it tonight,” Cunningham said.

Cunningham, who heads the Finance Board, says he doesn’t yet have a plan to rescue the city. But he’s read through the recovery plan submitted last month by city officials — the one rejected by State DCA Commissioner Charles Richman.

“The cash flow of the city is of great concern to me. I worry about things like the PILOT agreements that have to be executed with the casinos,” Cunningham said.

PILOTs — or payment in lieu of taxes — would help the city balance its cash-strapped budget. The Finance Board today finally voted to adopt Atlantic City’s 2016 budget. And while it includes a tax increase, Cunningham says, the overall impact will be $13 a year less for the average homeowner after county and school taxes are factored in. But city officials say they may appeal the takeover to superior court.

“It was always our concern that something like this would happen — someone who’s not accountable to anyone who could come and make decisions that could detrimentally affect Atlantic City,” said Atlantic City Council President Marty Small.

With the state’s takeover Atlantic City officials can now offer suggestions, but its future is now out of the city’s hands.