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Atlantic City is on a long losing streak. The town known for gambling is almost out of money. New Jersey lawmakers have a plan they say will get Atlantic City's finances under control. City leaders don't love the idea, but residents are hoping for anything that will change their luck. NPR's Joel Rose reports.
JOEL ROSE, BYLINE: Atlantic City is on an island between mainland New Jersey and the Atlantic Ocean. After you've been here a while, the locals like to say you won't want to leave.
AL BAILEY: We have an old saying. We got sand in our shoes.
ROSE: Al Bailey (ph) was born and raised in Atlantic City. He has no plans to go anywhere, even though his real estate business is slow. But Bailey says he knows many people who can't afford to stay.
BAILEY: A lot of people are walking away from their homes and just getting and leaving. They just can't make ends meet.
ROSE: Last year, the Atlantic City area had the highest foreclosure rate, not just in New Jersey but in the whole country. That's partly because of lost casino jobs, and it's partly because of rising property taxes. That's been hard on people like 86-year-old William Cheetum (ph). He used to own a house on North Maryland Avenue.
WILLIAM CHEETUM: We've been there for 50 years. The taxes just got to be getting too high for us. We was on a limited income. We were just taxed out of our home, basically.
ROSE: The region's economy is trapped in a downward spiral, says Oliver Cooke, an economist at Stockton University.
OLIVER COOKE: The big problem is the continuing decline in the casino industry. And now I think that has spiraled into a housing crisis and, of course, the fiscal crisis that the actually city of Atlantic City currently faces.
ROSE: The casinos used to account for much of Atlantic City's tax revenue, but four of the city's casinos closed, leaving only eight in business. Two-thirds of the city's tax base has disappeared since 2010. To make up for the shortfall, Atlantic City raised taxes on its residents by a lot, but the city is still coming up short.
How tenuous are the city's finances right now?
DON GUARDIAN: You know, we could run out of money in about a month.
ROSE: Mayor Don Guardian says without an infusion of cash, all nonessential city services will shut down on April 8. There was a tentative agreement with the state that was supposed to stabilize the city's finances, but Guardian says it's a bad deal for Atlantic City.
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GUARDIAN: The final piece of legislation that the state presented to us was far from a partnership. It was absolutely a fascist dictatorship.
ROSE: Guardian says the plan amounts to a total state takeover, one that would allow New Jersey lawmakers to sell off city assets and break contracts with the city's public-sector unions. Council President Marty Small says the city has been trying to avoid that by shrinking the government payroll.
MARTY SMALL: Everyone wants to point to spending. I mean, it's not spending. The spending is lower. The budget is lower.
ROSE: City leaders say they've cut about $25 million from the budget, but that leaves a deficit of more than 30 million this year and potentially hundreds of millions more going forward. Governor Chris Christie is defending the proposed state takeover.
CHRIS CHRISTIE: I have to have the freedom to do what needs to be done down there to fix the problem - bloated salaries, bloated pensions, bloated agreements, be able to negotiate with creditors. I've got to be able to do all that. If I don't have the tools to do that, then why bother?
ROSE: Without help from the state, Atlantic City could be looking at bankruptcy, and things may get worse before they get better. In the fall, New Jersey voters will decide whether to allow casinos in the northern part of the state closer to New York City. Oliver Cooke at Stockton University says that could take even more business away from Atlantic City.
COOKE: Those dollars are going to end up somewhere else. You know, that's empty hotel rooms and empty gaming halls.
ROSE: More empty houses, too. Joel Rose, NPR News, Atlantic City, N.J. Transcript provided by NPR, Copyright NPR.
