Borgata Hotel Casino demands back taxes

The payment is part of about $160 million the city owes the casino on top of its $270 million debt. The court would not force the city to pay but instead extended time for the two parties to negotiate. The judge did say Borgata could stop paying taxes until the dispute was resolved, a move that Mayor Don Guardian said would force the city into bankruptcy.

Guardian said the city simply doesn’t have the money and is already facing an about $40 million budget deficit while the state tries to hammer out a rescue plan for the city.

"Although there is no doubt that we owe Borgata money back from prior rulings, the question has always been how do we pay them back fair and reasonably given our current fiscal constraints?" he told the Associated Press. "Having Borgata exercise the option not to pay their first quarter taxes would be devastating to Atlantic City."

State Senate President Steve Sweeney—a principal architect of the state’s rescue plan—said he wants an Atlantic County bond to pay the debt. The county’s bond rating is excellent while the city’s bond ratings have been reduced to the lowest junk bond levels.

Sweeney said the county could bond for the debt with the city making the actual payments. However, Atlantic County Executive Dennis Levenson was skeptical of the proposal.

“What guarantee would the county have that the city would pay its debt?” asked Levinson about the bonding idea. “And what guarantee do we have that the state would come through on a guarantee?”

Meanwhile, Borgata officials are growing impatient. Joe Lupo, the Borgata's senior vice president, told the AP, "We are simply asserting our rights as a taxpayer to receive a refund of overpayments. We are also disappointed that the city is focusing solely on us in its attempt to resolve the situation. Atlantic City has paid refunds to every other (casino) property — except Borgata."