New Jersey government approves five-year takeover of Atlantic City
The New Jersey State Government has opted to assume control of Atlantic City as the municipality continues to struggle with financial instability.
The New Jersey Local Finance Board approved a five-year takeover on Nov. 9 to forestall a bankruptcy filling from the city, the New York Times reports. The vote came a week after the New Jersey Community Affairs Department rejected a financial turnaround plan the city had proposed, according to ABC News. That plan had included laying off 100 city workers, selling vacant land to its water utility and cutting spending.
Timothy Cunningham, the finance board’s head, was tapped to oversee the city, according to ABC. He said a major initial priority will be determining how the state and the city will interact. State officials will be able to hire and fire staff, sell municipal assets, break union contracts and take other measures to better the city’s financial predicament, Reuters reports.
“It’s an incredible responsibility – one that I’ve lost sleep over the last few weeks,” Cunningham said, according to the Associated Press.
On Nov. 14, New Jersey Gov. Chris Christie’s administration and Cunningham appointed former New Jersey attorney general and U.S. Senator Jeffrey Chiesa to oversee the city’s takeover, NJ.com reports.
"Senator Chiesa brings important insights and management experience from years of service in both the public and private sectors, which makes him an excellent candidate to oversee the responsible management of Atlantic City's finances," Charles Richman, commissioner of the New Jersey Department of Community Affairs, said in a statement.
Atlantic City has been under state fiscal oversight since 2010, according to Reuters. Gambling and casinos comprise a large portion of Atlantic City’s economy, as it is the only city in New Jersey that allows gambling.
Five of the city’s 14 casinos have closed since 2014, and that combined with nearby states’ legalization of gambling has pushed the city further and further into financial straits, Reuters reports. The city’s value decreased from $21 billion to $6 billion during that period, according to the Times.
The city had received a $73 million bridge loan in May and pledged to create a five-year plan for getting back to a stable financial condition, according to Reuters. When that plan was rejected, the state moved in to take the city over.
City officials, including Mayor Don Guardian, have voiced their disapproval of the takeover. Guardian has said the city may sue if the state government acts in a way that the city views as unconstitutional, NJ.com reports. While he said in a statement that the city is considering all of its legal options, he added that Chiesa “has served the state of New Jersey honorably and we will continue to work with him and the State to resolve our fiscal challenges.”
Phil Murphy, the lead Democratic candidate for next year’s New Jersey gubernatorial election, has said that if elected, he will cancel the state takeover of Atlantic City, according to Ewing, N.J., radio station New Jersey 101.5 FM.
“You have to find a better solution,” he said at a Nov. 11 speech in Atlantic City. “As opposed to bigfooting the community, I’d be working with the community.”