[toc]You cannot fault the residents of Atlantic City for being pessimistic sometimes. The oceanside city had its fair share of troubles over the years. When the financial situation in the New Jersey casino town got so dire the state intervened, it was only natural to expect more misfortune.
In actuality, things are looking up for the Atlantic City on multiple fronts. Casinos are bouncing back, but more importantly, the city is becoming a more diverse place than a haven for slot machines by the sea.
Atlantic City taxes down, but budget not without critics
The state government took over day-to-day operations of Atlantic City in November. Last month, the city issued its first budget since the change. The finances included a tax cut, something that has not happened in the city in a decade.
The budget decreased municipal tax by five percent. Additionally, it reduced the budgets for public safety by $8 million. The state also cut costs for administration and debt services.
These cuts do not come without criticism and possible fallout. The state is struggling to reach a compromise with local police officers, which could result in substantial layoffs.
Moreover, the city’s revised property tax on casinos reduces the amount of tax revenue going to the county. With less money coming in, Atlantic County may have to raise its property tax to compensate.
Nonetheless, Atlantic City Mayor Don Guardian gave the city credit, albeit while getting a dig in to NJ.com:
“These are the results we expected and worked hard for. Even though the entire state takeover was both excessive and unnecessary, the state did play an important role in helping us turn things around.”
NJ casino revenue keeps trending up
While city spending is down, casino revenue is up. March saw a 9.3 percent year-over-year increase in the category. New Jersey casinos took in $221.9 million, compared to $203 million in 2016. Certainly the growth of New Jersey online casinos accounted for a chunk of the increase, but the land-based casino earnings are trending upwards as well.
State support connected to influx in development on the Boardwalk
The other reason to be optimistic about the Atlantic City economy is the growing number of developers investing in the area. Hard Rock International just announced it is investing around $400 million in renovating the shuttered Taj Mahal Casino. Non-gaming projects like the Polercoaster and Showboat’s millennial-targeted fan expo indicate the city is trying to offer more than just casinos too.
New Jersey Gov. Chris Christie credited his office’s interference in Atlantic City for the turnaround:
“Hard Rock is not coming here because they weren’t to engage in a charitable enterprise. South Jersey Gas is not engaged in a charitable enterprise. So, these folks who are coming back into the city are here because they believe that we have turned the corner and they are willing to put their money behind the efforts that what we’ve done together.”
A recent profile of the city by USA Today indicates several other outsiders agree with Christie that the perception of Atlantic City is changing for the better. The new casinos are helping, but it is the non-gaming developments really making an impact. For example, Stockton University plans to build a large campus in the city.
”People saw [the Stockton deal] and realized the whole area was going to change for the better,” real estate developer John Hanson told the paper. “The key is the foot traffic, which is lacking in Atlantic City – it has always been lacking, really. People didn’t go out of the casinos.”
Is New Jersey spending wisely in Atlantic City?
Both sides of the aisle admit the turnaround in Atlantic City is a big win for everyone. However, some are questioning the price tag on the state takeover.
Christie put longtime friend and former US Sen. Jeffrey Chiesa in charge of the takeover. Since then, Chiesa’s private law firm has billed $1.2 million to the city for its services, which can run up to $400 an hour. So, while the state deducted $2.5 million in administrative costs from the city budget, roughly half that sum is going to pay the firm’s administrative fees.
Christie defends the cost as well worth the result. Others question if the state is spending and saving as wisely as it claims to be.
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