New Jersey Gov. Chris Christie called Tuesday for an imminent state takeover of Atlantic City, saying the seaside gambling resort is incapable of getting its finances together after years of overspending.
Christie, a Republican president candidate, said New Jersey needs to assert control over the city's finances.
"Atlantic City's finances are now the greatest threat to the city's well-being," Christie said. "The urgency of the city's current financial predicament cannot be overstated."
Christie and state Senate President Steve Sweeney said a takeover bill already introduced in the state legislature will be amended to incorporate elements of a financial assistance package the governor vetoed last week. That includes a provision to let the city's eight casinos make payments in lieu of taxes and prohibit them from appealing their taxes.
"We have to fix this government," Sweeney said.
The legislation will also give the state vast power over Atlantic City, including restructuring municipal debt, the right to cancel collective bargaining agreements, and the ability to sell off city assets and land.
Mayor Don Guardian, who initially opposed a state takeover, said Tuesday he decided to accept the state's help.
"From the looks on your faces, you don't like 'Kumbaya' moments," he told reporters at a Statehouse press conference. "I'm sorry for that. It's time for some tough decisions and some pain as we move forward."
Christie called for the legislation to be introduced and passed before the end of February, and made a rare promise in advance to sign it. The state takeover would last five years instead of the 15 envisioned in the original legislation.
The move comes as the cash-strapped city ponders asking the state for permission to declare bankruptcy — a request that appears less likely to be granted in light of the takeover plan. The City Council was to discuss a bankruptcy filing Tuesday afternoon, but cannot actually make a Chapter 9 filing without state approval.
The struggling seaside gambling resort is still reeling from Christie's veto of a financial aid package, $160 million in tax appeals from its top casino and the continuing slowdown of its casino industry.
Christie has long been critical of Atlantic City's municipal government, saying it spends far more than it takes in and repeatedly turns to the state for bailouts. Sweeney has said "there is Atlantic City fatigue in this building," referring to the reaction of lawmakers from the rest of the state when Atlantic City seeks more money from the state.
Guardian, a Republican entering his third year in office, says his administration has cooperated with Christie in making painful budget cuts, and is willing to do more.
Atlantic City's budget woes have been exacerbated by the cratering of its casino industry. In 2014, four of its 12 casinos went out of business. And many of the remaining casinos have successfully appealed their property taxes, convincing a tax court that they are worth less in a diminished market than they were when times were better.
Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.56 billion last year.