Three New Jersey state senators Tuesday said they would introduce legislation that would have the state assume management of Atlantic City's troubled finances.
Senate President Steve Sweeney, D-Gloucester, Sen. Paul Sarlo, D-Wood Ridge, and Sen. Kevin O'Toole, R-Wayne, announced their plan in release issued during Gov. Chris Christie's State of the State speech. The lawmakers did not include specifics about the plan, but Sweeney said if the legislature does not act soon he will support declaring bankruptcy for the city.
"We have given the city every opportunity to make the right decisions and take the needed actions to adequately address the ongoing fiscal crisis, but the job has not been done," said the senators in a joint statement. "It is time to take more serious actions and it has become obvious that the state has to take a more direct role to find an effective solution."
The press office for Atlantic City Mayor Donald Guardian did not immediately respond for comment on the takeover proposal.
Sweeney called Atlantic City's $262 million operating budget for 39,000 residents "bloated" and "unsustainable" at a price tag of $6,717 per person. The city suffered four casino closures in 2014 and was placed under emergency manager supervision by Christie a year ago when it faced a $101 million budget gap.
Moody's Investors Service issued a November report saying that Atlantic City needs a rescue package from the state to prevent being forced into bankruptcy. The city missed a $62 million tax refund payment owed to the Borgata Casino on Dec. 19 and has been trying to reach a settlement over $153 million it owes the large employer..
Atlantic City is rated Caa1 by Moody's and B by Standard & Poor's.