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Atlantic City Makes Deadline Bond Payment Of $1.8 Million

Atlantic City CasinosAtlantic City averted the embarrassment of becoming the first New Jersey municipality to default on its debt in 78 years by managing to make its bond payment of $1.8 million a few hours before it’s May repayment deadline was about to expire.

The payment which was due on May 1 provided Atlantic City an additional 24 hours as May 1 fell on a weekend. As a result, Atlantic City was allowed time to make the payment till May 2. The $1.8 million payment was eventually made a few hours before the deadline could expire and according to Mayor Don Guardian could be done only after scraping through the city’s remaining and limited financial resources. He added that he couldn’t be sure that the city would be able to make the next bond payment which is in June.

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Addressing a press conference subsequently, Mayor Guardian said that financially the city was on its last legs as it had to make a payment of $8.5 million to the school board on May 15 but it currently has only $6-7 million in hand. The city is on the brink of a financial collapse as a result of the decline in the casino industry which was once its mainstay.

Four of the city’s twelve casinos shutdown in 2014 and casino revenues declined from $5.2 billion in 2006 to $2.56 billion in 2015. State officials allege that the city has been living beyond its means for years, depending on the casino revenue to fund its lavish expenses.

The city is expected to receive the tax payments this week which will bring it close to $50 to 60 million. Atlantic City is additionally suing the state for $33 million which it was promised as aid but never released by the state government.

New Jersey Governor Chris Christie has proposed a state takeover of Atlantic City which allows the state to take control of the city and give it a wide range of financial and operational powers to fix the issues. Although passed by the State Senate, Democratic Assembly Speaker Vincent Prieto has refused to put the bill to vote saying that it violates fair labor laws and union bargaining rights.

Prieto has proposed an alternate bill that is expected to go to vote later this week. A counter proposal from Sweeney has also been presented but that is yet to be discussed. Mayor Guardian who opposes the takeover by the state has warned that such strong actions by state authorities could result in citizens losing their rights.

In a statement, Guardian said,

Today it’s Atlantic City, but tomorrow it could be Paterson, Trenton or Newark. Cities could fall like dominoes. It could even one day be Toms River, Cherry Hill or Middle Township

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