JERSEY CITY, N.J. -- With a potential default looming, Atlantic City said it will shut down "non-essential" government services for at least a three-week period next month.
Mayor Donald Guardian announced late Monday that City Hall will be forced to close on April 8 at 4:30 p.m. "due to financial circumstances beyond our control." The closure is expected to remain in effect until at least May 2 when the city is slated to receive its second quarter tax payments after efforts to receive an $8.5 million bridge loan from the state were unsuccessful. The mayor said the shutdown is needed so Atlantic City can pay county taxes and make its $600,000 April debt service payment.
"The choice was keeping the schools alive, making payments for our bonds," Guardian said of the decision to close City Hall.
He was speaking at a panel discussion at Saint Peter's University in Jersey City about a proposal to expand casino gambling in New Jersey beyond Atlantic City.
"If we defaulted on our debt every other municipality and county in this state would have a tough time bonding," Guardian said.
Guardian said police and fire department employees have agreed to work for free during the three-week stretch. Health benefits of all impacted employees not being paid will remain in place.
Atlantic City approaches April facing extreme fiscal pressures after budgeting $33.5 million in redirected casino taxes from a payment in lieu of taxes bill it anticipated the state would approve. Gov. Chris Christie conditionally vetoed a PILOT bill last November and Guardian said that even if state lawmakers agree to legislation this month it will not arrive early enough to avoid the planned shutdown.
The state legislature is also debating a bill that would give New Jersey increased power over Atlantic City finances including renegotiating outstanding debt and municipal contracts.
Four of Atlantic City's 12 casinos closed in 2014 and the city is saddled with an estimated $102 million deficit for 2016, according to Moody's. The Jersey Shore gambling hub is rated Caa1 by Moody's and B by Standard & Poor's with more than $400 million in outstanding debt.
