A state Senate committee has advanced a bill that is part of the takeover package that would create a payment in lieu of taxes program for the city’s casinos. The PILOT payments are designed to halt casino tax appeals and stabilize the city’s revenues. The bill also redirects casino investment payments and marketing money to help Atlantic City pay down its debt.
The bill is up for a final vote in the Senate this week, but an Assembly vote has not yet been scheduled according to the Associated Press. Assembly Speaker Vincent Prieto has expressed opposition to the bill unless it protects municipal unions from unilateral cuts.
The committee also approved the bill that would give the state control of Atlantic City’s finances despite the vote being interrupted by protestors form the resort chanting “Stop the Takeover.”
The bill would strip Atlantic City of most of its decision-making power and give the state the right to break contracts and sell off city assets
Wall Street Credit rating agency Moody’s Investors Service also released a report saying the city would be worse off financially without the takeover. Moody’s said if neither bill—the takeover and the PILOT bill—passes, Atlantic City could default on debt payments as early next month and possibly face bankruptcy.
Christie has said repeatedly that without the takeover bill, the state will not move to keep the city from filing for bankruptcy and the city would be “on its own.”
However Atlantic City Mayor Donald Guardian has said the city is considering moving for bankruptcy protection and continues to oppose the takeover.
Meanwhile, a majority of Atlantic City’s City Council members support dissolving the Municipal Utilities Authority and making the water utility a city department, according to a report in the Press of Atlantic City.
At least five members of the nine-member council favor the move, the Press reported and the council will vote on the plan this week.
The MUA has become a major point in a plan by the state to takeover Atlantic City’s troubled finances as the city grapples with about $350 million in debt in can’t afford to pay back. State Senate President Steven Sweeney wants the city to sell the authority to help pay down that debt, valuing the utility at about $100 million.
Though Sweeney’s plan has been endorsed by Governor Chris Christie, a financial manager appointed over the city by Christie has advocated dissolving the MUA and absorbing it into the city’s government.
The current bill granting the state complete control of the city’s finances does give the city one year to determine how to best monetize the MUA.
A February analysis of the authority said the city could save more than $4 million annually by making the utility a city department, the Press reported.
The issue has also drawn attention after news broke about issues with drinking water in Flint, Michigan. City officials say they want to protect residents and work to keep water rates low in the resort.
The authority is financially independent from the city and derives nearly all its revenue from customers.
