Atlantic City Faces Another Budget Deadline From New Jersey

  • City must submit revised budget by Monday to collect taxes
  • New deadline is weeks before five-year budget plan is due

In the midst of drafting a five-year budget to avoid a state takeover, Atlantic City was assigned another fiscal deadline to meet by Monday.

In a letter to Mayor Don Guardian, New Jersey’s Department of Community Affairs agency told the city to submit a revised budget by Monday so that the Local Finance Board can adopt it at a Nov. 9 meeting. Local Government Services director Tim Cunningham wrote that the draft budget he received "some time ago" relied too heavily on state aid without any planned tax increases by the city.

The $242 million budget introduced in August relied on $106 million of state aid, and according to the letter, would collect less tax revenue than Atlantic City received in fiscal 2015. Cunningham said that he sent these concerns to the city, but received no response.

"While no elected official desires to increase taxes, it is irresponsible not to maintain the current levy let alone not increase the rate in a way that brings in additional revenue," Cunningham wrote.

Transitional Aid

The letter also addressed the "lingering disconnect" between Atlantic City and New Jersey in regard to state aid. The city requested $37 million of transitional aid, which Cunningham wrote is "far more than the division has available to provide to the city or ever indicated that the city should expect to receive." Cunningham said that Atlantic City should identify all potential budget cuts before specifying a transitional aid figure.

The mayor’s office didn’t immediately return request for comment.

Monday’s deadline comes two and a half weeks before the city’s five-year fiscal recovery plan is due. If the plan is rejected, the state could sell its assets and void labor contracts through powers granted by legislation signed by Governor Chris Christie to prevent the city’s collapse. Cunningham wrote that while he understands the city is focused on designing its plan, the city’s legal obligation to submit a budget "exists independent" of the state takeover law.

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