Atlantic City Fails to Heed Budget Request as Rift Grows

  • Disagreement over whether the city submitted an annual budget
  • State says distressed city relies too heavily on state aid

The rocky relationship between Atlantic City and the state of New Jersey experienced more turbulence after a disagreement over whether the city submitted an annual budget.

In a letter to Mayor Don Guardian on Oct. 12, New Jersey’s Department of Community Affairs told the troubled resort town to submit a revised budget by Monday. Local Government Services Director Tim Cunningham wrote that the "draft budget" he received in August relied too heavily on state aid without any planned tax increases.

Guardian wrote back on Friday with a number of objections -- first and foremost, that the gambling hub’s earlier budget plan that didn’t need to be revised.

"There appears to be a disconnect as to whether a draft or introduced budget was submitted for your consideration," Guardian wrote in the letter provided to Bloomberg News.

The city’s draft budget was submitted in June, Guardian said, followed by the introduced budget on Aug. 18. That $242 million budget relied on $106 million of state aid, and according to Cunningham’s letter, would collect less tax revenue than received in fiscal 2015. Cunningham wrote that he sent these "fundamental concerns" to the city on Aug. 24, but received no response.

Five-Year Plan

Chris Filiciello, Guardian’s chief of staff, confirmed on Monday that the city didn’t submit a revised budget to the state. Guardian warned in his letter that a tax increase would be "devastating" for Atlantic City, which he said increased taxes by 50 percent over 2013 and 2014. DCA spokeswoman Tammori Petty declined to comment.

Monday’s missed deadline comes 11 days after violating the terms of a $73 million state loan, and just over two weeks before the city is due to submit a five-year fiscal stability plan to the state on Nov. 3. If the plan isn’t accepted, the city faces a possible state takeover.

The five-year budget will save roughly $73 million by 2021, the mayor said in a Monday press release. In his letter to Cunningham, he called for unity in the city’s final stages of drafting it.

"We have a plan that is weeks away from being finalized. It is carefully crafted, realistic, and achievable," Guardian wrote. "Together let’s plan for the future."

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