New Jersey lawmakers will soon consider a pair of bills to help Atlantic City. One of them, the “Municipal Stabilization and Recovery Act” would give the state much greater control of the local government. The other would allow the Atlantic City Casinos to make payments in lieu of taxes, otherwise known as the PILOT bill.
The financial ratings agency called MOODY’s sees 3 potential outcomes:
- If both bills fail: city could default on debt in April / May.
- If the PILOT bill passes: city would still have considerable cash flow challenges.
- If both bills pass and Gov. Christie signs into law: Atlantic City’s deficit drops by 73 percent with the budget balanced by 2020.
- Atlantic City has $240 million of debt.
- For decades, Atlantic City gave millions in casino tax revenue to state.
- Gov Christie and Senator Sweeney prefer takeover. Mayor Guardian & local leaders say plan goes too far.
- Guardian and other City officials support PILOT bill
- Major concern: takeover allows state to break union contracts.
- Moody’s says cost-cutting & difficult steps needed to revive Atlantic City. Otherwise, AC deficits could reach $30 million
- If both bills fail, state could pressure city to defer pension contributions. This would be short term solution at best.