Atlantic City's Plan to Avert State Takeover Rejected

State officials on Tuesday rejected Atlantic City’s five-year fiscal recovery plan that city officials had spent the previous 150 days designing, setting the stage for a likely court battle — and perhaps ultimately a state takeover of the beleaguered city’s finances.

Atlantic City Mayor Don Guardian had predicted last week that the state would accept most of the city’s recommendations. But Department of Community Affairs Commissioner Charles Richman listed a litany of what he found to be shortcomings in the proposal in relation to the standards of the Municipal Stabilization and Recovery Act. Among them:

• a failure to meet a requirement to offer a balanced budget for 2017
• an estimated $106 million shortfall for the city over the five-year period
• a workforce reduction of only 100 city employees, which Richman said “is not enough”;
• a decision not to raise taxes in the five-year period in spite of “the extraordinary need to raise revenue.”

In June, the state had granted Atlantic City officials a five-month period to demonstrate that it could fend off a state takeover that had been threatened by Governor Christie.