New Jersey is cutting salaries for Atlantic City firefighters after an October Superior Court ruling that limited staff reductions under the state’s Municipal Stabilization and Recovery Act.

Firefighter salaries in Atlantic City, which has faced state intervention since November 2016, will be reduced 11.3% on Dec. 10, according to Lisa Ryan, a spokeswoman for New Jersey’s Department of Community Affairs. The state initially sought savings for the junk-rated city through 100 firefighter cuts and later 50, before Superior Court Judge Julio Mendez limited the cuts to 15 in his latest decision. The cut would leave the city with 180 firefighters.

The former Revel Hotel Casino, pictured far left, is slated to reopen as a new gaming facility under new owners in early 2018.
The former Revel Hotel Casino, pictured far left, is slated to reopen as a new gaming facility under new owners in early 2018.
Bloomberg News

“While we have made considerable progress in stabilizing Atlantic City, significant work remains in restraining the City's unsustainable finances,” Ryan said in a statement. “Judge Mendez's decision requiring 180 firefighters instead of the 148 the State and City believe is sufficient to maintain public safety in Atlantic City resulted in $3.8 million in additional costs.”

A Nov. 3 report from Moody’s Investors Service said the 15 firefighter reductions allowed will save Atlantic City $1.75 million in the 2018 fiscal year and equate to 0.8% of the city’s 2017 budget. Judge Mendez's ruling prevents the cuts from taking effect until after Feb. 5, which marks a 60-day period after a federal grant for the positions expires.

The state’s move seeking cost-savings from firefighter salary cuts occurs just before a change at New Jersey’s capital. Democratic Governor-Elect Phil Murphy is set to take over for Gov. Chris Christie in January. Murphy appointed Lt. Gov. Elect Sheila Oliver to head the DCA, leaving New Jersey’s takeover powers of the Jersey Shore gambling hub in flux. The DCA under state designee Jeffrey Chiesa has been empowered since Nov. 9, 2016 to alter Atlantic City’s outstanding debt and municipal contracts.

Atlantic City Hall will also see changes in January after Democratic Councilman Frank Gilliam Tuesday defeated incumbent Mayor Donald Guardian on Election Day. Neither Guardian nor Mayor-Elect Gilliam responded to a request for comment on the state's salary cuts.

Atlantic City had $224 million in bonded debt, according to its latest debt statement issued at the end of 2016. The city, which is rated CCC-plus by S&P Global Ratings and Caa3 by Moody’s Investors Service, issued $138 million in bonds this year through New Jersey’s Municipal Qualified Bond Act program to finance casino property tax appeal settlements forged by Chiesa.

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Corrected December 22, 2017 at 10:56AM: An earlier version gave the wrong S&P rating.