Judge Rules in Favor of Atlantic City Government in DOE Lawsuit

Atlantic City Mayor Don Guardian
Atlantic City Mayor Don Guardian

Atlantic City’s scored a minor victory against the state Tuesday when Atlantic County Superior Court Judge Julio Mendez ruled that the state does not have the authority to freeze city assets and force the local government’s hand in making a late payment to its public schools. The municipality is now filing a counterclaim against the state to have it hand over unpaid aid from the 2015 budget.

Christie brought the lawsuit forward earlier this month, when the city missed its April deadline for repaying property tax collections to its local school board. The city paid $4.25 million back to its schools on Tuesday, a move that caught them up for this month and weakened the state’s argument for swift intervention. The city’s counterclaim is taking aim at $33.5 million in state aid that has become tied to a payment in lieu of taxes agreement with its remaining casinos.

Mayor Don Guardian, one of the defendants in the DOE’s lawsuit, said in a statement that he hopes the state comes to a consensus on its dueling takeover bills. Despite the uproar over the competing bills from Senate President Steve Sweeney (D-3) and Assembly Speaker Vince Prieto (D-32), either proposal would bring those same funds to Atlantic CIty through a long-delayed PILOT agreement.

“The real issue now is for Governor Christie and the Legislature to agree on a compromise to quickly end the fiscal crisis in Atlantic City,” Guardian wrote. “I have spoken with many legislators who want to find a compromise, and they are willing to find a way to save Atlantic City. I am confident that once we get past the politics, we will find a winning solution that everyone can agree upon.” Judge Rules in Favor of Atlantic City Government in DOE Lawsuit