Maybe Gov. Christie was bluffing, but his threatened opposition to North Jersey casinos would do more good for Atlantic City's flailing economy than the takeover bill he was pushing. More casinos will only accelerate Atlantic City's losses and make a rebound that much more difficult.
Facing heightened casino competition in nearby Philadelphia and New York, four of Atlantic City's 12 casinos were shuttered in 2014, and the losses cascaded into a fiscal crisis so severe that the city could run out of cash Friday. Heightening the drama, Christie sued the city Monday for $30 million in property tax revenue owed to its schools.
The governor threatened to block North Jersey casinos in an effort to make the state Assembly pass legislation to take over Atlantic City, giving the state imperial powers to fire employees, sell assets, and break contracts. The city does need significant changes, including hard bargaining with unions. But local officials argue that they are already taking those steps and more outlined by an emergency management team Christie hired last year at a cost of $2.6 million. And they rightly observe that state takeovers of Camden and other jurisdictions have failed. The city would be better off working to reduce costs and increase revenues under the state fiscal oversight that has been in effect since 2010.
In addition, a companion bill has more potential to help the city than the takeover legislation. It would stabilize local finances by allowing the casinos to make predictable payments in lieu of property taxes, which have been perpetually appealed and reduced in recent years.
The current PILOT (payments in lieu of taxes) bill contains a clause allowing the casinos to drop out of the deal if the state allows gambling in the north. It would be better for Trenton to guarantee that no more casinos will be built for at least the duration of the PILOT agreement, allowing the city a chance to right itself during a period of stable tax receipts while preserving its statewide gambling monopoly. That would help the city and state make more serious efforts to diversify its economy and tourism by taking advantage of assets beyond gambling, including its seaside location.
The North Jersey casinos would provide an unknown amount of money to Atlantic City for redevelopment, but the proceeds are already being divided up by politicians for their favorite donors and other interests. The determined push for more casinos shows that New Jersey's politicians and bosses are more interested in maximizing gambling revenues than helping the troubled gambling resort they created. There are no easy solutions to Atlantic City's problems, but cutting into its customer base, and cutting the city out of decision-making, won't solve anything.