Last April, we and three Atlantic County taxpayers filed a Superior Court lawsuit in Atlantic County to force City and State officials to follow NJ law and State Constitution.?? NJ?s Local Budget Law requires each town and county in NJ to make a balanced budget by March of each year.??? State officials ignored that law since they took over Atlantic City finances in October 2010.??
For past two years, State ?monitor? did not make budget for Atlantic City until September, when most money for year was?already spent.?? For previous five?years, State Director of Local Government Services?let Atlantic City illegally spend $100 million more than it collected, and go $500 million into debt.
When even casinos could not? afford big real estate tax hikes almost every year in Atlantic City,?State let?City give big?tax breaks to roughly two thirds of city?s taxable properties.??? All 8 casino hotels, 109 Tanger Outlets shops and restaurants, Bass Pro Shop and 4,500 housing units now pay P.I.L.O.T. (Peanuts In Lieu of Taxes), leaving only middle class business and homeowners paying full taxes.
State and Local officials responded to our lawsuit with?lies and deception.???? Every month, mayor Guardian said there was enough money to pay Wall Street bonds in full every month.??? But on July 28, Mayor Guardian pressured City Council into holding an illegal meeting with no advance public notice.?? Only 4 of 9 council members voted to borrow $73 million from state, and sell site of former Bader Field airport and water utility to pay that money back.??? State Budget Law required the approval of 6 council members in two separate votes at public meetings.
On August 17, Mayor Guardian admitted for first time that City was not borrowing any money at all, but simply agreeing to repay $73 million already advanced to City in form of previous State payments for public schools and county, and for allowing city to illegally defer employee pension and health benefit contributions!
When Superior Court Judge Mendez order State and City officials to prepare a balanced budget by August 15, State officials and mayor produced a budget that was ?balanced? with $106 million in state grants.???? This, of course, makes no sense.??? How can State on July 28 claim City needs to illegally borrow $73 million for operating expenses, when it agreed to give the City $106 million in grants?
It is obvious?to everyone?that ?State officials want Atlantic City officials to fail.????State officials from Republican Governor Christie to Democratic State Senate President Sweeney demand?that Atlantic City officials make a plan?to cut $100 million off expenses by November, or State will take over.??? But State has been running Atlantic City since October, 2010.?? And these same State officials refuse?to give Atlantic City officials?bankruptcy or insolvency powers?to make the cuts the state is demanding.???
So far, Atlantic City Mayor Don Guardian and Council President Marty Small have gone?along with State?s plan for an assisted suicide of elected local government in Atlantic City.? Are they “useful idiots”??? Or did they make some deal to be taken care of after the takeover?
A majority of five Atlantic City council members are starting to wake up and push back.?? Council members Gilliam, Tibbets, Delgado, Cheng, and Kurtz refused to vote for $73 million loan on July 28.?? On August 17, they denied Mayor the 5 votes he needed to dissolve Independent Authority for water utility.???? They also refused to allow special council meeting to reverse that vote.
The next City Council Meeting is Wednesday, September 7.???? We urge these five council members to adopt a resolution refusing to allow the Mayor to make any more Wall Street bond payments without a specific resolution of City Council finding that City has enough money.??? We also urge these five council members to make a resolution denying the Mayor any power to make any binding agreements with State unless a majority of council approves.
Coincidentally, Judge Mendez adjourned an August 25 conference on our case to Thursday, September 8–the day after that Council Meeting!????? Seth Grossman, Executive Director?? August 28, 2016.