New Jersey lawmakers advance Atlantic City rescue package
Reuters
Published May 23, 2016 05:43PM ET
New Jersey lawmakers advance Atlantic City rescue package
By Hilary Russ
(Reuters) - A New Jersey legislative committee on Monday pushed forward on a compromise aimed at helping Atlantic City after weeks of uncertainty between dueling lawmakers over the best way to save the distressed gambling hub.
The package of bills would give Atlantic City 150 days to devise a five-year recovery plan and a balanced budget. The state can move to take over city operations if it disagrees with the plan, but only if it can survive an appeal by the city to the courts.
The legislation also provides cash relief, with $120 million of annual revenues from payments casinos have agreed to make in lieu of property taxes, another $45 million of other funds, plus as much as $50 million in state aid, Republican Mayor Don Guardian said.
"It's the solution that we've been looking for," Guardian said in a phone interview.
The state's Assembly Judiciary Committee moved a package of legislation to the full body for a vote as soon as Thursday, a spokesman for the majority office said. The Senate would also have to approve the bills before they could go to Republican Governor Chris Christie for consideration.
Assembly Speaker Vincent Prieto and Senate President Steve Sweeney, both Democrats, bickered over a takeover, with Guardian and Christie also taking sides and the dispute at times turning ugly.
Atlantic City has lost nearly 70 percent of its property tax base since 2010 as casino values plummeted because of competition from neighboring states.
Guardian told Reuters that second-quarter tax revenues came in "much greater than we anticipated, so there's no question that we have cash in the bank now for our June bond payment as well as our June payroll."
The city narrowly avoided defaulting on its bonds in May. Some bondholders are betting on a state bailout for the junk-rated seaside resort town.
The city has at least $240 million of outstanding bond debt. Guardian believes it can bring debt service payments down from about $38 million a year to under $10 million, he said.
"This gives us the opportunity to go out to find some qualified bond counselors that have done refinancing or restructuring of debt," Guardian said. "I think that's very doable."
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Written By: Reuters
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