New Jersey State Senate Approves Atlantic City Rescue Billby
Both legislative houses agree to Christie's changes on bills
Credit raters warn of effect on finances without stability
Christie in November returned to legislators bills that would diverted some gambling funds that the struggling resort city was counting on to help close a $101 million deficit in 2015. Without the infusion, the city’s cash flow risks going negative by April or sooner, Moody’s Investors Service said in a report last month.
The legislative package also includes a measure that would establish fixed payments from casinos instead of levies based on real-estate values, which would prevent tax appeals that strain the city’s finances.
A delay in approving the bills would have worsened Standard & Poor’s view of the city’s financial position, according to the New York-based ratings company last month. It has the B rating on watch for downgrade. Moody’s ranks the city’s debt two steps lower at Caa1, seven levels into speculative grade.
The changes requested by Christie include having the state’s local finance board collect the revenue from the casinos and make its release dependent on the city’s fiscal progress. The state Assembly agreed to them last month.