Is Atlantic City headed for Bankruptcy like Detroit?
To the public eye, this mainly seemed like a problem for the Club. However, the reality is that it goes far beyond this and is another big hit for Atlantic City as a whole. Down to 11 casinos, Atlantic City just lost another establishment from which it draws property taxes. This problem is compounded by the fact that the city is borrowing money to repay $270 million worth of casino property tax appeals.
The appeals stem from 2006-07, when Atlantic City revalued their tax base. The city had just pulled in $5 billion in casino revenue, which was their record. But after massive struggles due to new competition in surrounding states, those property tax estimates have been halved. And certain casinos like the Golden Nugget are still paying the same tax rates that were determined in 2007.All of this has Republican Mayor-elect Don Guardian very worried about his city. In fact, Guardian believes that something needs to be done very soon or Atlantic City could end up like Detroit. In June of 2013, Detroit filed the largest municipal bankruptcy in US history at $20 billion. Here’s a look at what Guardian had to say on the matter:
The problem is that (casino) income declined, as well as a certain. In a few years, we will be broke under the way the city is doing business, and the (casino tax) appeals is just one part of it. Detroit continued to bond until (it) couldn’t bond anymore. It increased taxes and lost population. Some of those same things are happening in Atlantic City, and we have to take steps to avert bankruptcy.
In an effort to avoid the same situation that Detroit is dealing with, Guardian plans on re-evaluating the property tax levels and cutting the city’s budget. With some drastic cuts and more appropriate property taxes, the mayor hopes to save AC from a fate similar to Detroit’s.