The New Jersey Legislature has approved a revised version of an Atlantic City rescue package that incorporates recommendations laid out by Gov. Chris Christie.
The package of bills aimed at restoring financial stability to Atlantic City was passed by the New Jersey State Senate Thursday three weeks after assembly approval and now heads back to Christie's desk to sign.
The Republican governor conditionally vetoed key parts of the package on Nov. 9 saying the bills would not create a course for "long-term prosperity" of the struggling gaming hub.
Christie requested changes on was a bill that would have eliminated Atlantic City's marketing arm, the Atlantic City Alliance, and directed its $60 million in funding for 2015 and 2016 to the city. Under the altered bill, the $60 million would instead go to the state and Atlantic City must submit a financial plan to the Local Finance Board before receiving the funds.
Another key part of the package would enable Atlantic City's eight remaining casinos to 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. An additional bill proposes reallocating the state's casino alternative tax to pay debt service on Atlantic City-issued municipal bonds.
"These bills are critical for Atlantic City," said Atlantic City Mayor Donald Guardian in a statement. "We will continue to be good partners as we further reduce the cost of government in our city and diligently recruit new businesses to Atlantic City."
The press office for Christie did not immediately respond for comment on whether he would sign the revised bills.
"These bills are needed to bring fiscal stability to the city, the casino industry and the local economy," said State Sen. Jim Whelan, D-Northfield, in a statement. "They will help us to move beyond the city's fiscal problems and work to stabilize the tax base and help protect against increases in property taxes for the residents of Atlantic City and Atlantic County."
Atlantic City faced a $101 million budget gap before adopting a 2015 fiscal plan in late September that relied partly on anticipated revenues of $33.5 million in redirected casino taxes included in the rescue package. The city is also in the midst of negotiations with the Borgata Casino over $153 million in tax refunds owed and missed a $62 million payment that was due on Dec. 19.
"These bills are a good step forward in bringing stability and certainty to Atlantic City's finances," said Senate President Steve Sweeney, D-Gloucester, in a statement. "The PILOT plan will help provide consistent revenue and help prevent the instability and uncertainty resulting from tax appeals. This will address Atlantic City's immediate fiscal problems and help protect the city and county taxpayers from being hurt by revenue lost to potential tax appeals by the casinos."
Christie appointed corporate restructuring attorney Kevin Lavin as Atlantic City's emergency manager in January and he released a March 23 report urging "shared sacrifice" among stakeholders including the possibility of extending maturities for bondholders. Lavin is expected to release a second report early this year.
Moody's Investors Service issued a November report saying that the rescue package would help prevent Atlantic City from being forced into bankruptcy, but would not "cure" its long-term structural deficit. The ratings agency downgraded Atlantic City's credit ratings six notches to Caa1 a year ago following Christie's emergency manager appointment.
