Atlantic City made $1.8 million in interest payments, averting what would have been New Jersey’s first municipal default since the Great Depression as state lawmakers bicker over how to assist the troubled gaming hub.
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Last week, it wasn’t clear at all that the city would make the payment, which was due today.
As they did regarding North Jersey casinos, Sweeney and Prieto have gone back and forth over the best way to save Atlantic City – which is facing a massive $437 million debt and could go bankrupt in the next couple weeks.
“Financially, we’re running on fumes”, the mayor told reporters Monday.
Mayor Don Guardian said the payment was made at 10 a.m., an hour before a news conference at which he came out swinging against a proposed state takeover of Atlantic City’s finances.
City payroll of about $7 million is due on Friday and its next $8.5 million payment to its school district is due on May 15. The city and the state are tangled in a lawsuit that seeks to guarantee the schools are paid on time. Credit-rating agencies have warned that an Atlantic City default would have repercussions throughout the state.
Atlantic City still has roughly $240 million in debt still outstanding, and Guardian would not speculate on whether or not the city will be able to make its obligations in June.
The city’s finances are reeling from the contraction of its largest taxpayer, the casino industry, which saw four of its 12 casinos shut down in 2014.
Opposed to state takeover of the city pushed by Christie and state Senate President Stephen Sweeney (D-Gloucester), Guardian and city council President Marty Small lobbied the members of the state Assembly to pass an alternative plan set for a vote in the chamber Thursday.
“The Senate bill backed by the governor would deprive Atlantic City’s public sector workers of the right to bargain collectively and of the right to organize without fear of retaliation”, the letter says. “Cities would fall like dominoes, one city after another losing its home-rule to the State government”.
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Had Atlantic City not made the payment, it would have become the first New Jersey municipality to do so since Fort Lee in 1938.
