New Jersey Gov. Chris Christie said he would rather Atlantic City file for bankruptcy than send more money to the gambling hub.
Christie spoke Thursday, moments after a proposed Assembly rescue package failed to come up for a vote.
The Republican governor, who in past has stated he would not support an Atlantic bankruptcy plan, said in a press conference that state officials informed him that the municipality will run out of cash in 10 days. State approval is required for a New Jersey local government to file for Chapter 9 bankruptcy.
Christie had opposed the bill sponsored by Assembly Speaker Vincent Prieto, D-Secaucus, which would have given the state control of Atlantic City only if it failed to meet annual benchmarks.
The governor called on lawmakers to instead get behind a stronger Senate package. The Senate legislation, sponsored by Senate President Steve Sweeney, D-Gloucester, would empower New Jersey's Local Finance Board to renegotiate outstanding debt and municipal contracts for as long as five years if the city does not plug its estimated $102 million budget deficit in 130 days.
"If they come up with something, great, if they do not, then you know bankruptcy will be the only option and while I would regret having to go down that road, it is a road that I will have no choice but to go down," said Christie. "I am not sending any more money to Atlantic City without the authority to fix the underlying problem."
The press office for Atlantic City Mayor Donald Guardian did not immediately respond for comment on Christie's remarks.
Prieto said at a press conference late Thursday he does not have support in his Democratic caucus for the Senate bill and is hopeful legislators can reach a deal that Christie will support. His bill, which was pulled from Thursday's calendar, would have given Atlantic City two years to turn its finances around before state intervention took effect.
"I'm looking for a bill that protects Atlantic City's civil liberty, protects the workers that are there, protects their self-governance," said Prieto. "We're going to work [Friday], Monday, Tuesday, hopefully get something that all the Assembly came come together on."
Sweeney called on Prieto to put his Senate bill, which is also sponsored by Assembly Majority Leader Louis D. Greenwald, D- Lindenwold, up for an Assembly vote. Christie has said he would sign Sweeney's legislation and, if that passes, also back a companion bill that would allow Atlantic City's eight remaining casinos to make payments in lieu of taxes for 10 years, including $30 million collectively in 2016.
Standard & Poor's lowered its Atlantic City credit rating to CC from CCC-minus on Wednesday citing a high likelihood of default "even under the most optimistic circumstances." Moody's rates Atlantic City Caa3 and estimates the government has more than $400 million in debt outstanding. The city made its $1.8 million May debt service payment Monday and next owes $1.6 million on June 1, according to Moody's.
