Strong state oversight is helping the New Jersey gambling town stay out of bankruptcy court despite a 64 percent loss of its tax base and declining gaming revenues, write the authors of a new report from The Pew Charitable Trusts. Former Detroit Emergency Manager Kevyn Orr had been consulting for the appointed emergency management team there, and the restructuring efforts have so far kept the East Coast city from a Chapter 9 filing since Gov. Chris Christie named an emergency manager in January.
The Pew report is titled “Atlantic City’s Watchdogs: How strong state oversight helps municipalities avoid bankruptcy,” and details the current financial situation in Atlantic City as well as the history of New Jersey’s state oversight and intervention in local finance.
Among Atlantic City’s financial issues: Gambling revenues cut in half in the last eight years. Property values declining. A third of its casinos shutting down. “Unsustainable bond issuances” funding pension payments. “Imminent danger of running out of cash.”
Here’s a comparison on Detroit and Atlantic City, compiled by NextChapterDetroit.com in January:
|Detroit||Atlantic City, New Jersey|
|Population (2010 U.S. Census)||714,000||39,500|
|Median Household Income||$26,300||$29,200|
|Current Annual City Budget||$1 billion||$258 million|
|Approximate No. of City Employees||9,400||1,100|
|Monthly City Revenue from Casinos||$16 million||$18 million|
|Financial Situation at the time of Emergency Manager Appointment||$327 million budget deficit in FY 2012. Decades of population decline.||$35 million budget shortfall. Loss of 8,000 casino jobs|