A day after Gov. Chris Christie failed to sign legislation that would have helped Atlantic City, city officials are planning an emergency meeting next week to consider declaring bankruptcy.
Filing for bankruptcy would allow Atlantic City to reduce its costs and improve its financial situation, said Mayor Don Guardian.
“We come out with a clean slate, we drop about $40 million in debt alone, and we renew every collective bargaining agreement,” he said Wednesday.
Guardian cautioned, though, it could be a bad precedent for other towns to consider.He said bankruptcy is not inevitable.
“If you look at 35 other cities and see all of the funding that the state of New Jersey provides to those cities annually both in state aid to the city as well as to the school, if we only had our proportionate amount we wouldn’t be here today,” he said.
The state would have to approve a bankruptcy filing, and Assembly Speaker Vinnie Prieto said that’s something he wants to avoid.
“When you do that, then your bond rating really goes down,” Prieto said. “Your creditors get a lot less money. If you could avoid that, that would be the right thing to do.”
Council President Marty Small said Atlantic City needs financial help, but Senate President Steve Sweeney has said it won’t get more bailouts from the state.