Atlantic City officials will discuss the possibility of filing for bankruptcy protection at an emergency city council meeting Tuesday.
Mayor Don Guardian announced the meeting Thursday. It will come after New Jersey Gov. Chris Christie rejected an Atlantic City financial rescue package Tuesday that had been approved in the state legislature.
The Jersey Shore city's 2015 budget adopted in September relied on $33.5 million in anticipated revenues from redirected casino taxes included in the rescue bills to address a $101 million deficit.
The legislation would have enabled the city's eight remaining casinos enter into a payment-in-lieu of taxes program for 15 years and aggregately pay $120 million annually over 15 years instead of a traditional property tax.
"With the veto of the Atlantic City PILOT bill earlier this week by Governor Chris Christie, the City of Atlantic City has been left with no other option but to explore bankruptcy," said Guardian in a statement. "The time is now because the State has failed to deliver on their promises."
Any Atlantic City bankruptcy would require state approval.
Atlantic City Emergency Manager Kevin Lavin released a Jan. 15 report showing that the city's cash flow would run out by early April if a rescue package is not implemented. The proposed aid package would have reallocated New Jersey's casino alternative tax to pay debt service on Atlantic City-issued municipal bonds. The gambling hub also would have had a chance to receive $60 million in funding directed to the city's marketing arm, the Atlantic City Alliance for 2015 and 2016.
"We've done everything we can and worked with the State's appointed emergency manager and everyone else who said they wanted to help Atlantic City," said Guardian. "But when our partners did not follow through on their end, we were left holding the bag with a huge financial hole that we could not fill without their help. We are still open to working with the governor and Senate president to resolve this issue, but without their financial support, we are left with no more options."
Senate President Steve Sweeney, D-Gloucester, has proposed a state takeover of Atlantic City.
