People walking on the boardwalk in Atlantic City, U.S.
New Jersey Governor Chris Christie on Tuesday rejected legislation intended to shore up the finances of Atlantic City, a move that could hasten the state’s takeover of the struggling casino hub.
Christie vetoed a bill that would have established fixed payments from casinos instead of levies based on real-estate values, which would prevent tax appeals that strain the city’s finances. He declined to take action on bills that that would have diverted some gambling funds to the city.
Without those measures, the city will run out of cash in April, according to a report released on Friday by Kevin Lavin, the emergency manager appointed by Christie.
Christie’s actions “reinforce the pressing need for Atlantic City to get its finances in order and to get it done as soon as possible,” said Senate President Stephen Sweeney, the highest
ranking Democratic legislator, in a statement. “The best way to get that done is to have the state assume management of the city’s finances.”
Last week, Sweeney introduced legislation that would place the city’s operations under state control for 15 years.
The rejection of the bills by Christie, who is seeking the Republican presidential nomination, comes after he sent them back to the legislature in November with a conditional veto. The legislature complied with his requests to modify them with provisions such as having the state’s local finance board collect revenue from the casinos and make its release dependent on the city’s fiscal progress.
“Once again, our absentee governor has shown a brazen disregard to putting Atlantic City back on the road to fiscal recovery,” said Assemblyman Vince Mazzeo, a Democrat who represents the community of 39,000, in a statement.
Atlantic City’s fiscal crisis was precipitated by the closure of a third of its casinos in 2014 as competition from neighboring states eroded its onetime dominance over gambling in the East Coast. The city’s gaming revenue last year was less than half its 2006 peak of USD5.2 billion.
Bankruptcy is now a possibility, said Mayor Don Guardian.
“If the state is not able to come up with the funding we need within the next few weeks, we will have no choice but to declare bankruptcy, “ he said in a statement on Tuesday. The state’s Local Finance Board must approve any filing.
Unless it comes with more subsidies, “it is unlikely that a state takeover will meaningfully improve the prospects” for Atlantic City’s future, Matt Fabian, a partner at Concord, Massachusetts-based Municipal Market Analytics, said in a report on Tuesday. Fabian says bankruptcy remains a risk.
Joelle Farrell, a spokes-
woman for Christie, didn’t comment on his decision during an interview in Trenton. Romy Varghese, Bloomberg
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