Senate President Steve Sweeney (D-3) formally introduced his “Municipal Stabilization and Recovery Act” Wednesday, the revised version of the Atlantic City takeover bill that saw him at odds with city government over the best way to shore up the gaming capitol’s sagging property tax revenues and mitigate the fallout from its massive bonded debt. The bill is an attempt to avoid a municipal bankruptcy, and would the state Local Finance Board assume control of the city’s finances. The new bill leaves the possiblity of renegotiated contracts with city workers on the table, shortens the timeframe for the PILOT program for casinos, and introduces new mandatory payments on the part the casinos.
“The intervention plan will enable the state and the city to work together to accomplish what Atlantic City can’t do on its own,” said Sweeney. “The city’s fiscal crisis is severe and immediate. It owes bondholders more than $500 million, has more than $150 million in debts for tax appeals and has no ability to get financing from the bond market. Property values have plummeted, the foreclosure rate is the highest in the country and unemployment is greater now than during the recession. The state has to take a more direct role with more effective solutions.”
The bill does not outline specific city functions to be taken over by the Finance Board during the takeover’s five-year term, but leaves the possibility open. It also establishes a one-year deadline for the city to find a way to monetize its
A companion bill, the latest incarnation of a payment in lieu of taxes deal for Atlantic City’s remaining casinos, would establish regular payments on the casinos’ part for ten years. The casinos would pay $120 million the first year with their payments increasing by two percent annually for nine years, with the possibility of further increases if gross gaming revenue unexpectedly grows.
The new legislation would also have casinos pay collective payments of $30 million annually for the first three years, $15 million the following year, $10 million the next year, then $5 million annually for five years. Each casinos’ payment into those sums would be based on its share of gross gaming revenue.
“This is a pathway to creating an efficient, accountable and transparent Atlantic City Government,” co-sponsor Kevin O’Toole (R-40) said. “Taxpayers from Bergen County to Cape May have sent hundreds of millions of dollars to Atlantic City in recent years, and this is a step allowing us to protect those investments. This intervention will expedite the city’s evolution into a new prime-time destination for people on the East Coast and beyond.”
“We want to give the taxpayers of New Jersey an active voice in how public funds are spent in Atlantic City,” said fellow co-sponsor Paul Sarlo (D-36). “The state continues to provide substantial resources to a city with a budget that is far out of proportion for its size and population. We have to bring responsible financial management and practices to Atlantic City.”