Atlantic City Mayor Donald Guardian has proposed a new budget with $35 million in cuts in an effort to bring the cash-strapped Jersey Shore locality back to fiscal health.
Guardian’s $206.3 million budget proposal presented Wednesday at a city council meeting marks a 15% drop from last year’s $242 million spending plan and is 21% lower than the 2015 budget. The first budget since New Jersey took over Atlantic City finances in November features $6 million of cuts to debt service at $30.8 million and allocates $8 million less for public safety.
Guardian, who running for his second term as mayor this fall, said in a statement before presenting the budget that state overseers have played an instrumental role in crafting the new spending plan that features a 5% property tax cut. The Republican mayor fought hard against state intervention, which took effect last November after New Jersey’s Local Finance Board rejected the city's five-year recovery plan.
“From the beginning, I have said that we need to work with the State of New Jersey to stabilize Atlantic City and to reduce the outrageous property taxes that we inherited from years of reckless spending,” said Guardian. “Even though the entire state takeover was both excessive and unnecessary, the state did play an important role in helping us turn things around.”
New Jersey Gov. Chris Christie praised former U.S. Sen. Jeffrey Chiesa for his role as the state’s designee leading the financial recovery and his contributions achieving the city’s first property tax cut in a decade. Christie credited Chiesa with withstanding union challenges to make firefighter and police cuts as well as reaching a $72 million settlement with the Borgata casino that saves the city $93 million on $165 million of owed property tax refunds from 2009 to 2015.
“As promised, we quickly put Atlantic City on the path to financial stability, with taxpayers and employers reaping the benefits of unprecedented property tax relief with no reduction in services by a more accountable government,” said Christie in a statement. “I commend Senator Chiesa for leading Atlantic City to turn the corner, holding the line on expenses and making responsible choices to revitalize the city.”
Atlantic City is planning to issue $72 million in bonds to pay for the Borgata settlement though New Jersey’s Municipal Qualified Bond Act. The savings from the settlement brokered by the state resulted in S&P Global Ratings upgrading Atlantic City’s deep junk-level general obligation bond debt two notches to CCC from CC last month. The city, which faces $224 million in bonded debt, is rated Caa3 by Moody’s Investors Service.
“Over the past five months, I have met so many smart, talented, tenacious people who want to see the city succeed,” Chiesa said in a statement. “This inspires me every day to tackle the challenges facing the city to ensure that the progress we’ve made continues.”