Running out of money: Atlantic City spends more than 10 counties in NJ

In his fight against the Republican Atlantic City mayor and the Democratic Assembly speaker over the city’s financial future, Gov. Chris Christie comes armed with numbers and sarcasm.

His crusade for a state takeover of the cash-strapped city, including the power to rip up municipal union contracts, relies on a startling statistic: Atlantic City’s government spends around $6,600 a year per resident.

No other city comes close.

Newark, for example, spends $2,344 per resident.

“Never, Joe, did I think that Newark would be seen as a paragon of fiscal conservatism,” Christie quipped in a comment directed at Essex County Executive Joseph DiVincenzo Jr., a Democratic ally who was in the audience at Christie's news conference last week in Newark.

Sure enough, those are the calculations if you divide the cities’ budgets by the Census Bureau’s estimate of their population, which for Atlantic City was 39,551 in 2013. The $262 million municipal appropriation is the city’s highest ever, narrowly.

Atlantic City Mayor Don Guardian contends it’s misleading, though.

Recently at the Statehouse, which Guardian has visited frequently to lobby against the takeover legislation, the mayor said the city’s operating budget in 2015 was $220 million, following cuts of around $25 million. He said the larger number includes $27.5 million for tax appeal payments, $7.5 million the state required as a reserve and $7 million it was directed to set aside for lawsuit liability.

'Atlantic City's in a unique situation'

Even if one excluded those, the spending still amounts to well over $5,000 per capita — still far more than any other city.

Guardian’s explanation for that is that in addition to the residents, there are 40,000 people who work in Atlantic City and that the population swells on weekends and during conventions, to peaks he estimates at 200,000 to 300,000.

“Treat us like a city that has 300,000 people there and stuff like that, and the budget’s OK,” he said.

Newark, with around 278,500 residents, as well as being an employment and transit center, has a budget of $653 million.

“Atlantic City’s in a unique situation,” Guardian said. “We still, even with four casinos closed, we still have 25 million visitors every year. And you come to Atlantic City to play. You don’t just come here to go and sit down. This isn’t a college town where you come and do a lot of studying, maybe Thursday nights you go out and get drunk and things. This is a town where everybody comes and plays every day, and we’ve got to make sure it’s safe for them. And that comes at a cost.”

The state says 70 percent of Atlantic City's spending is for salaries and benefits, so any fiscal reset would have to include such line items.

Christie says Atlantic City’s police chief is paid $212,000, his deputy chief $193,000 and the deputy fire chief $183,000, suggesting all of those salaries are too high. He and other critics also rail about outlays such as pensions for lifeguards.

“This city government has shown itself, and it’s not just this administration but many administrations prior to this, have shown themselves absolutely unable to control the expenses of government,” Christie said last week on Townsquare Media’s WPG 1450.

Dominick Marino, president of the Professional Firefighters Association of New Jersey, said the Atlantic City Fire Department has cut its budget by $10 million over the last eight years. The city’s police union has agreed to $17 million in salary cuts since 2012, reducing the force from 363 to 285 officers.

“We are willing to sit and talk, just like the mayor’s willing to sit and talk, we just need the governor to stop dictating and sit down and negotiate,” Marino said.

Christie is unwilling to alter the takeover legislation, which has already been passed by the Senate. As part of its efforts to pressure Assembly Speaker Vincent Prieto to pass the bill, Christie’s office last week released a chart showing per capita spending in the nine towns in Prieto’s legislative district, all of which spent less than $3,000 a person.

Shrinking tax base, falling fortunes

Christie says Atlantic City has a bigger budget than almost half of New Jersey’s 21 counties.

“That’s absolutely unacceptable spending to have on the backs of the people of Atlantic City, and I want to remind them that that’s where the money comes from,” Christie said. “The money comes from the people of Atlantic City, and that is absolutely unacceptable.”

Counties have different responsibilities than municipalities, in terms of things like first responders and trash collection, so that comparison may be a little unfair.

But more importantly, a lot of that money doesn’t come from the people of Atlantic City, which helps explain how the budget got that large.

Most of it comes from businesses, particularly casinos. Until a few years ago, commercial properties accounted for almost 80 percent of Atlantic City’s tax base. When casinos fell on hard times, they were able to successfully appeal to reduce their property assessments by huge numbers.

The city’s tax base shrunk by two-thirds, from $20.5 billion as recently as 2010 to $7.4 billion last year. Atlantic City once had the largest tax base in New Jersey; it now ranks 14th.

Even with those reductions, commercial properties still account for 65 percent of Atlantic City’s tax base.

Residential property taxes have roughly doubled in the last seven years, from an average of around $3,000 in 2007 to around $6,000 now.

Guardian says North Jersey areas eyeing their own casinos — another prospect the mayor and like-minded allies are fighting — should see the expense of his city’s government as a cautionary tale.

“That’s the price of a sin industry. That’s the price of casinos in your town,” Guardian said. “And if you think when you have a casino in Jersey City that you’re not going to increase all the crime that goes with gaming, unfortunately, you’re really kidding yourself.”

Michael Symons has covered the Statehouse since 2000. He can be reached at michael.symons@townsquaremedia.com or @MichaelSymons_ on Twitter.