Budget Cuts and Layoffs Recommended in Report From Atlantic City’s Emergency Managers

The two emergency managers that were brought into Atlantic City by Gov. Christie are recommending big spending cuts and possibly cutting up to 30 percent of the city's workforce to stabilize the city's finances.

Kevin Lavin and Levyn Orr were appointed by Gov. Christie earlier this year to help turn the troubled city around. Their report, which was released today, recommends some deep cuts, but they say bankruptcy is not in the cards.

In the report, Lavin said,

Commendably, the City, County, and State have made great efforts to confront these headwinds and develop plans to address the significant revenue shortfalls that are a direct consequence of the precipitous decline in both the City's ratable tax base and other limited revenue sources, a decline that has become even more severe with in just the past 90 days. Indeed, the decline in revenues has exceeded the worst estimates that were published earlier this year. Moreover, absent the continuation of significant state assistance, the City is simply incapable of self-funding even its reduced budget for the coming fiscal year and this incapacity will only continue and worsen throughout the following years. The City simply cannot stand on its own. Thus, one thing is clear – there is no reasonable likelihood that these headwinds will abate at any point in the near future. In fact, as discussed in detail herein, all reasonable forecasts confirm that these troubling factors will continue to beset the City for the foreseeable future and, absent immediate and urgent corrective action, the City's ability to function as a thriving and viable municipal enterprise is imperiled.
In short, the acute financial distress facing the City is imminent and the causes of such distress are not transitory. Absent urgent, material realignment of revenues and expenses, this crisis will rapidly deepen and will threaten the City’s ability to deliver and maintain essential government services impacting the health, safety and welfare of its residents.

As the city faces an over $100 million budget gap, the three-dozen page report calls for an initial $10 million cut to the city's proposed budget for this year that is beyond the $30 million already cut by Mayor Don Guardian. In addition, The Press of Atlantic City reports Lavin said the city may have to lay off 20 to 30 percent of its workforce.

During last week's Ask The Mayor program on WPG Talk Radio 1450, Mayor Guardian said he anticipated the number of layoffs in the city would be, “about a hundred.” The mayor also commented that, for the most part, layoffs would not affect city services.

Following the report, a statement was released by Senate President Steve Sweeney said, "This report does nothing more than dramatize the fiscal crisis in Atlantic City that could have been stabilized five months ago if the administration had committed to support the recovery plan I offered along with Senator Whelan and Assemblyman Mazzeo that would have stopped the bleeding and restored financial stability. Today’s report was 60 days in the making and it reached the same conclusions that we did in November: that decisive action is needed to stabilize Atlantic City’s finances, reduce expenses, protect local taxpayers and reposition the casino industry for future growth."

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