Atlantic City Bounces Back from Financial Troubles
It wasn't clear last week if Atlantic City would be able to pay its bills. City Hall, with Mayor Don Guardian at the helm, hinted that the city might not have enough funds to cover loan payments and employee salaries. A spokesperson for Guardian didn't specify how this lack of funds would impact the city's remaining payments.
But Guardian himself declared on Monday that the city was operating with a deficit of $33.5 million. He blamed the problems on a series of casino closures, mounting debts, poor decisions across all levels of government, and the absence of a state bailout bill that could bring in much-needed revenue.
Related: Atlantic City Narrowly Escapes Insolvency
Once the bustling gambling mecca of the Jersey Shore, Atlantic City hit rock bottom in 2014 when four casinos shut their doors, making up a third of the city's total casinos and swallowing up 70% of its tax revenue. Now, city leaders are scrambling to find the cash to pay essential employees, like police, firefighters, and teachers.
Currently, Governor Chris Christie and the mayor are embroiled in a bitter dispute over the city's finances, which has led to a legal fight. The state filed suit earlier this month to force the city to pay teachers before other city employees, as the city claimed it couldn't afford to pay everyone.
Facing a potential closure due to lack of funds, the city council managed to keep crucial services running by switching employees to monthly salaries.
Moody's recently downgraded the city's credit rating. Lawmakers in New Jersey fear that a financial collapse in Atlantic City could pull the entire state down with it, and are considering two emergency bills to help guide the city through its financial overhaul.
In response to the proposed state takeover, Guardian firmly rejected the idea, calling it draconian and unconstitutional.
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With words like 'business' and 'commerce' sprinkled throughout the text, it's worth noting:
- Atlantic City's financial struggles have caused challenges for local companies, with tax decreases, infrastructure challenges, and a casino industry downturn playing key roles.
- However, positive developments like the Bader Field redevelopment plan and private investment through community development corporations (CDCs) have also been instrumental in helping revitalize the city and its businesses.
Years ago, Atlantic City was the epicenter of gambling excitement along the Jersey Shore. But troubling times came in 2014, when four casinos closed down, forcing their way into the history books. These shuttered casinos accounted for a third of all Atlantic City's casinos and consumed 70% of its tax revenue.
The city now finds itself grappling with a financial crisis, stretching to make ends meet and pay essential workers like police, firefighters, and teachers. Governor Chris Christie and Mayor Don Guardian are in a heated dispute regarding the city's finances, which has escalated to legal action.
Allegedly, the state is trying to get the city to allocate funds to teachers before other municipal employees, due to the city's financial woes. In response to these worrying developments, the city council has managed to continue essential services by paying staff in monthly installments instead of their usual bi-weekly wages.
The city's current credit rating has been downgraded, and state legislators fear that an insolvency in Atlantic City could send shockwaves across the whole of New Jersey. Consequently, they are considering two emergency bills designed to lend support to the city as it navigates its financial overhaul.
Guardian has been vocal in his rejection of a state takeover, describing it as draconian and unconstitutional. However, this stance has not deterred whispers that the city may face a temporary closure if funds cannot be found to cover expenses.
The financial situation in Atlantic City has yielded varying effects on its commercial sector. While tax decreases, the proposed Bader Field redevelopment project, and private investment through community development corporations (CDCs) have contributed to some positive outcomes, infrastructure challenges, the decline of the casino industry, and shifting tax structures have also presented burdens.
