New Jersey Takes Over Debt-Ridden Atlantic City Government | NBC 10 Philadelphia

The Economic Impact of Casino Closings

New Jersey Takes Over Debt-Ridden Atlantic City Government

Mayor Don Guardian said Atlantic City may challenge the takeover in court, after the state lays out its vision for the struggling city

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    NEWSLETTERS

    Cosmo Condina/Getty Images, File
    File photo of Atlantic City boardwalk at dusk.

    Republican Gov. Chris Christie's administration has seized power in Atlantic City, taking control of the assets and major decision-making in the struggling seaside gambling resort that is half a billion dollars in debt.

    The New Jersey Local Finance Board voted Wednesday to take over the city's main governmental functions after the state government rejected a proposed five-year financial turnaround plan.

    The state can now sell assets including the former Bader Field airport property and the city's much-coveted water utility. It also can reverse decisions of the City Council, break union contracts, and hire or fire workers, but declined to give itself the power to file for bankruptcy on behalf of the city.

    "This is an example of what this country could turn out to be under Chris Christie and President-Elect Donald Trump, taking away our rights and sovereignty," said Steve Young, an Atlantic City community activist. "Who do we talk to as residents? What will government look like with the state of New Jersey overpowering the residents? We are headed for some bad times, and your city could be next."

    Chris Christie's Approval Rating in NJ Dips to New Low

    [PHI] Chris Christie's Approval Rating in New Jersey Dips to New Low

    A new survey shows Republican Gov. Chris Christie's favorability and job approval ratings in New Jersey are at record lows.

    The Rutgers-Eagleton poll on Monday showed a record low of 19 percent have a favorable view of Christie. That's down four points from six weeks ago.

    The weeklong survey ended a day before the jury delivered guilty verdicts in the George Washington Bridge lane closure trial. Former Christie aide Bridget Kelly and bridge authority executive Bill Baroni were found guilty on all counts.

    Christie denies wrongdoing and wasn't charged in the 2013 scheme.

    The poll also found the governor's job approval rating slipped six points to 20 percent, compared with six weeks ago.

    The poll surveyed 772 residents with a margin of error of plus or minus 3.9 percentage points.

    (Published Tuesday, Nov. 8, 2016)

    Timothy Cunningham, head of the finance board, will oversee the city, unless he appoints someone else to do it. He said one of the first priorities is to determine the way the state will interact with the local government. He could not immediately say what powers the mayor and City Council would retain.

    Mayor Don Guardian said the city may challenge the takeover in court, but would give the state a chance to lay out its vision of the new working relationship first.

    The takeover occurred a week after the state Community Affairs Department rejected a proposed financial turnaround plan that would have seen the city lay off 100 workers, cut spending and sell its largest tract of vacant land to its water utility, keeping both in private hands.

    The state said that plan did not provide sufficient financial stability for a city already heavily dependent on state aid.

    The city's financial strife is largely due to the decline of gambling. Atlantic City has seen five of its 12 casinos close since 2014, taxes have more than doubled over the last six years, and the city's base of taxable property has declined by two-thirds in recent years.

    In 2006, Atlantic City's casinos took in $5.2 billion; last year that had fallen to $2.56 billion. When times were good and casino money was flowing, that was enough to support the city's spending. But now, not even major cuts are enough to ward off a takeover.

    Cunningham said the city's water utility, which it refused to privatize, will be a major part of the solution to the city's financial woes. But he stopped short of endorsing its sale.

    The takeover can last for five years, unless the city makes sufficient progress on its finances before then.

    "It's an incredible responsibility, one that I've lost sleep over the last few weeks," Cunningham said. "I'm sure I'm going to lose sleep tonight."