State lawmakers split on future of Atlantic City takeover

New Jersey lawmakers are split over how much longer the state should control Atlantic City, with competing Democratic and Republican bills proposing extensions of five years and a decade, respectively, as the 2016 takeover law heads toward its next expiration.

Sen. John Burzichelli has introduced legislation calling for the Municipal Stabilization and Recovery Act to continue for another five years. Sen. Vince Polistina is preparing a separate bill that would extend the takeover through 2036. The law, which authorizes the Department of Community Affairs to make major decisions for the city, is set to end in late 2026 after being renewed in 2021.

History of State oversight

New Jersey took control of Atlantic City in 2016 following a $100 million budget deficit. Lawmakers at the time cited high taxes, rising expenses, and what they described as poor governance in the city. The shutdown of five casinos between 2014 and 2016 contributed to financial losses and tax appeals that eroded the city’s revenue.

Former Gov. Chris Christie initiated the takeover, which moved through the Democratic-controlled Legislature. Gov. Phil Murphy, who campaigned in 2017 on returning authority to local officials, later signed the 2021 extension.

In a June interview with The Press of Atlantic City, Murphy reiterated support for the arrangement, saying the state and city have “a successful partnership” and that the effort is “heading in the right direction.” He said: “We’ve done a lot of really good things together. You have to have a very compelling rationale to break that partnership up.”

Murphy added: “It is a partnership that is moving things in the right direction, perhaps not at the pace I might like, and certainly we’ve not tackled everything. But there is a plan in place for the big items, and progress is being made. The partnership is working.”

County-level opposition

While lawmakers advance proposals for more years of oversight, some officials in Atlantic County question the results of the intervention. In an interview with Casino.org, County Executive Dennis Levinson said the city’s condition raises concerns about continuing state control.

“I want Atlantic City to succeed. I want it to thrive, but our streets are deplorable. The lighting is bad. We can’t even synchronize the lights. These are basic fundamental things that cities have to do,” Levinson said. He added: “If someone is in control of something, they have responsibility for it. The mayor and council’s hands are tied. The state controls the city, from fruit to nuts.”

Levinson said the casinos “are extremely desirable” with “the top chefs and top entertainment in the world,” but argued that the city is “deteriorating” and that the state has fallen short “either by design or by incompetence.”

Future of the PILOT Program also in focus

Debate over the takeover has also brought renewed attention to the payment-in-lieu-of-tax program created in 2016. The PILOT structure replaced tax assessments that casinos had repeatedly challenged, and bases annual payments on gross gaming revenue.

Polistina has said he favors structuring the program to “continue in perpetuity.” Levinson disputed the need for the arrangement in a February letter, asking: “Why is this unique to New Jersey? Why is the NJ Legislature unable to provide a mechanism for proper tax assessments of casinos without putting the burden on our hardworking families who already contend with the highest state taxes in the country?”

As the bills advance, New Jersey will determine whether Atlantic City’s governance continues under state oversight for a limited period or for another decade.