Atlantic City to Remain Under State Control

Publish: 18.10.2018

The Office of the Governor of New Jersey has announced the state will continue to supervise the budgetary revival of Atlantic City for three more years.

This plan has been revealed as the part of the “Building a foundation for a shared prosperity” report, recently introduced by Special Counsel James E. Johnson.

Johnson’s report, already submitted to the Governor’s office, carefully details a list of proposed actions deemed necessary to be handled before the local government can take back the control of the city.

AC Still Not Ready to Take the Full Control

The report also said Atlantic City had a number of challenges that would only be resolved with significant direction from and partnership with the State.

The Municipal Stabilization and Recovery Act (MSRA) was adopted nearly two and a half years ago, with only one goal – to help resolve a dire situation the city was in. At that time, Atlantic City was getting ready to file for bankruptcy, while the city’s casinos witnessed a yearly drop in gross gaming revenue of 7.5% form 2006 to 2014. Not to mention that some of the casinos went out of business.

The new legislation allowed the state to take over some of the powers of the local government for a period of 5 years.

The report suggests the strong state oversight should continue until the state’s authority in the city pursuant to the MSRA expires or until the municipal capacity becomes strong enough and the city’s reliance on state transitional aid gets reduced or eliminated.

According to available information, Murphy will continue the state’s supervision, although he campaigned for the office promising to put an end to it. Murphy said the state wouldn’t exercise its authority over Atlantic City and would act more as a partner.

Phil Murphy: State to control AC until 2021
The governor said positive things were happening in Atlantic City, but pointed out that long-standing challenges such as poverty, unemployment, affordable housing, and public health had to be tackled as well.

Investing in people who live and work in Atlantic City was highlighted as one of the most important tasks.

Local Authorities Optimistic

Commenting on the state’s recovery program, Atlantic City mayor Frank Gilliam said the citizens deserved to have their local elected officials control their destiny and added he was very optimistic that this represented a huge step in the right direction for Atlantic City and its future.

Since the MSRA came into force, the municipal budget had decreased by 15%, while county school and tax rates have increased by 10.7% and 15.4% respectively. On the other hand, property taxes have stayed pretty much the same.

Johnson’s report recommends that the state government form a task force to review and determine whether the current regulatory framework can be changed. It also suggests the city needs to do more in order to promote itself as a destination.

The report says there are no estimates when will Atlantic City recover the market share it had until 2006, but states that online gaming can be an important factor in the overall rise in casino revenue.

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