New Jersey legislators are divided on the future of state control over Atlantic City. Democrats and Republicans have introduced competing bills seeking a limited extension of five years and a decade, respectively, as the 2016 takeover statute approaches its renewal deadline.
Senator John Burzichelli has proposed the Municipal Stabilization and Recovery Act, advocating for a five-year extension. Meanwhile, Senator Vince Polistina is drafting a separate piece of legislation aimed at prolonging state oversight until 2036. The existing law, which empowers the Department of Community Affairs to make significant decisions concerning the city, is slated to expire at the end of 2026 after its last renewal in 2021.
Background of State Oversight
The state of New Jersey assumed control of Atlantic City in 2016 in response to a $100 million deficit. At that time, lawmakers attributed the financial challenges to high taxation, increasing expenditures, and what they termed ineffective governance within the city. The closure of five casinos from 2014 to 2016 worsened financial distress and led to a decline in city revenues due to tax appeals.
Former Governor Chris Christie initiated the takeover, which gained traction through the Democratic-led Legislature. Current Governor Phil Murphy, who campaigned in 2017 on a platform of restoring local authority, subsequently signed the extension in 2021.
During a June interview with The Press of Atlantic City, Murphy reaffirmed his backing for the arrangement, describing the collaboration between the state and the city as a “successful partnership” that is “moving in the right direction.” He stated: “We’ve accomplished significant improvements together. A robust rationale would be required to dissolve this partnership.”
Murphy emphasized: “This collaboration is yielding positive results, albeit not as quickly as I would prefer, as challenges remain unaddressed. However, a comprehensive plan is in motion for addressing key issues, and progress is noticeable. The partnership is effective.”
Local Criticism
While discussions around extending state oversight are underway, some local officials in Atlantic County express skepticism about the effectiveness of state intervention. In an interview with Casino.org, County Executive Dennis Levinson voiced concerns about the city’s current state and the consequences of ongoing state control.
“I want Atlantic City to succeed and flourish, but our roads are in poor condition. The street lighting is inadequate, and we can’t even synchronize the lights. These are fundamental responsibilities that any city must manage,” Levinson lamented. He added: “When someone is in control, they must be held accountable. The local government’s hands are effectively tied. State authorities oversee everything, from A to Z.”
Levinson acknowledged that the casinos “offer outstanding attractions,” featuring “world-renowned chefs and entertainers,” yet insisted that the city is “declining” and that the state’s performance has been lacking, either due to neglect or incompetence.
Scrutiny of the PILOT Program
The debate surrounding the takeover has also sparked renewed scrutiny of the Payment in Lieu of Taxes (PILOT) program established in 2016. This program replaced traditional tax assessments that casinos had repeatedly contested and is based on their gross gaming revenue.
Polistina has expressed his intent to structure the PILOT program for “perpetual continuation.” Levinson challenged the necessity of this arrangement in a letter from February, questioning: “Why is this system exclusive to New Jersey? Why can’t the NJ Legislature create a framework for fair tax assessments of casinos without shifting the tax burden onto our hardworking families, who already face the highest state taxes in the nation?”
As the legislative process unfolds, New Jersey will grapple with the decision of whether state governance over Atlantic City will persist for a limited duration or extend for another decade.
<!-- Root element of PhotoSwipe. Must have class pswp. -->