Atlantic City has advised its municipal workers that it will file a layoff plan with New Jersey and is seeking to cut 300 jobs from the municipal work force.
A letter advising of the move has been sent to all city employees.
The city also intends to reopen negotiations on all of its labor contracts with the exception of the police department, which has another year on its current contract. That could result in reduced benefits for workers.
“We understand that the union representatives of your respective unions have attempted to convey to you the seriousness of the city’s economic problems and it is not an understatement that severe financial issues are affecting the city,” the letter said.
The state would have 30 days to approve a plan after it is filed. Affected employees would then be given a 45-day notice of a layoff.
“This shouldn’t come as a surprise to anyone,” Atlantic City Mayor Donald Guardian told the Press of Atlantic City. “We’ve been looking at this for a while.”
The city wants to reduce its workforce by 200 to 300 employees through attrition and layoffs by mid-2015, Guardian said.
The city has been facing a massive decline in taxes paid by casinos. As the city’s gaming revenue has been almost cut in half since 2007, several casinos have won major reductions in their tax assessments. Add to that the four city casinos to close this year and the city has faced a huge revenue decline.
Guardian said the reduction would only partially solve the city’s problems.
“The numbers I was talking about at the beginning of the year were about 200 reductions,” Guardian told the Press. “By the middle of the year, after the first or second casino closed and we knew we’d have a tax increase, I was talking 200 to 300. No one who looks at city government doesn’t think we have 300 people too many.”
Guardian, however, said he hopes a substantial amount of the cuts can be made through attrition. The mayor did say that whole departments of city government could disappear, especially if they duplicate county and state services.
Still, Guardian said the city is not interested in the option of removing its police department in favor of county or state policing. Camden New Jersey, for example, went to a county-run police force to cut costs.
Guardian said he is not in favor of a county police force and does not believe New Jersey Governor Chris Christie is in favor of such a change either.
The move comes as Standard & Poors—saying they are concerned about the city’s revenue structure—announced they are dropping the resort’s bond rating from A- to BBB+.
In its statement the financial services company said the closure of four casinos this year is troubling since the city’s casinos accounted for 56 percent of the assessed value of its tax base for 2014.
Standard & Poor’s defines a BBB rating as “Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.” The plus indicates good standing relative to others in the rating category.
