Last December, NJ State government loaned $40 million to Atlantic City government at an almost loanshark rate of 7.5%. This is part of a $140 million loan package where Atlantic City plans to borrow another $100 million more elsewhere.
Normally, governments borrow money to build new roads, bridges, or buildings that benefit the city and increase property values.
But this $140 million is needed to ?cover casino tax appeals?.?? It will not build or improve anything.?? It will only ruin even more business and home owners push property values even lower.
State and local officials say this money is needed to ?cover casino tax appeals?. ?But it looks a lot like ?hush money?.?? It seems the purpose is to delay the financial collapse of Atlantic City until after our Republican Governor Chris is done running for Governor.
Who is going to pay this money back??? And when??? Atlantic City government under its new Republican Mayor Guardian just agreed to spend $251 million on current spending this year. That comes to $6,250 for each of its 40,000 residents.?? Even with a state monitor, Atlantic City plans to spend another $147 million on Its public schools this year. That comes to roughly $25,000 for each of its 6,679 students.
How can fewer casinos and struggling property owners in the rest of city pay for that along with that $140 million, plus $454 million previously borrowed by city government?
And who would invest in these bonds??? Would it be the same people who ?invested? in $400 million Revel Casino ?mezzanine? construction loan bonds also backed by nothing??? Who were those ?investors??
Isn?t it strange that these ?investors? lost $400 million in less than a year, and yet we didn?t hear a word about lawsuits, investigations, or even accusations of fraud?
Did any public employee pension funds invest in those worthless Revel bonds??? Did any union pension funds??? Are Revel Casino construction bonds part of the $3.5 trillion of debt bought by the Federal Reserve for its ?quantitative easing?? Is everybody keeping quiet about this until after the Statute of Limitations expires and nobody can go to jail for it?
If private investors like me are struggling to get 2% interest on our 401(k)?s, how can NJ public employee pension funds claim they are getting 7.5%??? Is it because they are investing in things like Revel Casino and Atlantic City ?hush money? bonds?
The only way to fix Atlantic City is to go through a bankruptcy.?? Atlantic City taxpayers cannot pay another year of $251 million city and $147 public school budgets.?? Most government employees today make 78% more than people who do the same jobs for private companies.?? We must immediately restructure all public employee contracts and cut those budgets by at least one third.?? We must refuse to borrow any more money, let alone $100 million more.?? And we must pay not more than 20 cents on the dollar of the $454 million already owed.
We must do the same thing to fix the New Jersey Public Employee Retirement System (PERS) funds. Governor Christie must order the pension fund administrators to immediately declare their funds to be as insolvent as Bernie Madoff?s funds. All pension payments should be based on funds available?not funds promised. The fairest approach would be to cap all pension payments at $50,000 per person per year, rather than pay everyone 35% on the dollar. The political insiders who gamed the system to juice up their pensions just before they retired should take the biggest hit. The ordinary workers who retired with $40,000 salaries should be hurt the least.
Once this is done and we stop pretending, it will be obvious criminal investigations will be needed. We must demand a full audit of Atlantic City and government and public school finances and of the New Jersey pension funds immediately?before wrongdoers are protected by the Statute of Limitations.
Seth Grossman, Executive Director