ATLANTIC CITY — A major credit-rating agency likes parts of the city’s recently introduced $206 million budget.
For one, the budget was introduced earlier than the past two years, according to a report S&P Global Ratings released Thursday.
And the budget takes “significant measures” to improve finances and the city’s credit quality, the report said.
The proposed budget is about 15 percent less than last year, relying largely on $8 million in cuts to public safety, as well as $6 million less in debt service and other reductions.
Significant risks remain, particularly due to ongoing labor lawsuits involving the state takeover.
“We note that recent unilateral changes by the state to police and firefighter contracts are currently being litigated and if not approved by the courts, could impede the state’s ability to enact fiscal reforms,” S&P said.
Jeffrey Chiesa, the former U.S. senator leading a state takeover, recently implemented contract changes to the public safety unions that cut salaries and benefits for police and firefighters.
The unions have sued to block those cuts, arguing the takeover law is unconstitutional.
The proposed budget does not include a state Department of Community Affairs proposal, also being litigated, looking to cut 19 full-time police officers to save money, the report notes.
S&P said that would lead to more cost savings for the year but notes a state loss in court “may increase pressure for the state to address other fixed costs.”