Atlantic City Sues State For $33.5M Rescue Package

atlantic city casinosIn a final bid to save itself, Atlantic City is suing the state of New Jersey for the $33.5 million that it was promised but failed to receive till date. The city made the demand in its defense to the suit filed by the state’s Department of Education which wanted to take control of the City’s finances until the city’s debt to the school system was settled.

The $33.5 million rescue package was to be given to Atlantic City as a part of a bailout mission under which the city’s eight casinos would make cash payments to the city instead of property taxes in exchange for agreeing to not appeal their earlier tax assessments. The rescue package was approved by the state Legislature twice but it stalled after Governor Chris Christie vetoed the proposal on two separate occasions.

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According to court filings made by Atlantic City, the city administration had depended on the $33.5 million and had included it in the city’s latest budget. City officials stated that if the money was given to them as promised by the state, the schools would have been paid with no problems.

In a statement, Mayor Donald Guardian said,

The real issue now is for Governor Christie and the Legislature to agree on a compromise to quickly end the fiscal crisis in Atlantic City.

I have spoken with many legislators who want to find a compromise, and they are willing to find a way to save Atlantic City. I am confident that once we get past the politics, we will find a winning solution that everyone can agree upon.

Christie has so far released no comment on the issue. The political jousting came even as the city paid the schools another $4.2 million in order to keep to its committed calendar of payments. The city continues to owe the schools payments to the extent of $25.5 million which is to be made by July 15.

As a part of its lawsuit, the state had demanded Judge Julio Mendez to order the city to keep aside the initial $25.5 million it is expected to receive in tax revenues during early May. The tax revenues are expected to be around $40 million to $50 million and the state wanted to ensure that the money was used by Atlantic City to clear its debt towards the school district.

The judge refused the request saying that since the city administration was up-to-date on its payments to the schools, there was no reason to impose additional demands.