New Jersey acted to take control of Atlantic City away from its elected officials amid a slump in gambling revenue after the state rejected the city's turnaround plan because it didn't cut costs enough to stave off bankruptcy.
The state's Local Finance Board voted 5-0 to approve a five-year state takeover of the city yesterday, giving the board the right to sell the city's assets, negotiate union contracts and dismiss the city's workers.
Timothy Cunningham, the head of the Local Finance Board, will assume the powers of the city's governing body, except that of declaring bankruptcy, said Tammori Petty, Director of Communications at the New Jersey Department of Community Affairs. Cunningham wasn't available to comment today, Petty said.
"We will continue to work with the State of New Jersey on behalf of our residents while continuing to keep all of our options on the table," Atlantic City Mayor Don Guardian said in a statement Thursday in which he defended the city's recovery plan.
That plan, which was rejected, didn't include a proposed balanced budget for 2017, included several financial shortfalls over the recovery period totaling about $106 million, and didn't cut deep enough to stave off bankruptcy, according to New Jersey Department of Community Affairs Chairman Charles A. Richman.
Atlantic City became the gambling hub of the east coast after casinos were legalized in 1976, attracting patrons from Washington to Boston. In recent years, though, bordering states including Pennsylvania and Maryland have legalized gambling to keep those in-state gambling dollars closer to home.