Atlantic City Skyline

Water view of the Atlantic City skyline, Tuesday Aug. 16, 2016. (Michael Ein/Staff Photographer)

ATLANTIC CITY — The city’s proposed budget is down nearly $20 million from last year, but it relies on requested state aid the city might not get.

The $243 million budget introduced this month uses $106 million in state aid. That includes $37 million of requested Transitional Aid, which are funds for financially distressed municipalities.

There’s no guarantee the state will give all $37 million requested by the city. The city received $13 million in Transitional Aid in 2015. Twelve other municipalities received Transitional Aid last year.

“If they say they’re only going to give $15 million and the fund doesn’t come from another source, it will be a monumental tax increase on the city side,” said Council President Marty Small, chairman of the Revenue and Finance Committee.

The proposed budget is down from $262.5 million last year to $242.9 million. Overall salaries and wages decreased by nearly $30 million to $81 million, according to a summary of budget appropriations.

“I think everybody took a hit, a haircut,” Mayor Don Guardian said of last week. “No one group represented the big savings.”

“Other expenses” increased from $110 million to $119 million. Part of that increase is due to the city deferring paying last year’s group health insurance, something it can’t do again this year, said Chris Filiciello, Guardian’s chief of staff. The city plans to spend $36.7 million in debt service, up from $34.6 million last year.

The municipal tax rate would be flat from last year, but increases in county and school tax rates raised the total rate nearly 29 cents to an estimated $3.71 per $100 of assessed value, according to the tax assessor’s office.

A house assessed at $150,000 would pay an estimated $5,565 in taxes, an increase of $432 from last year.

The $117 million raised by taxes is down from $132 million last year. The city’s ratable base has plunged from $20.5 billion in 2008 to about $6.6 billion today.

Councilman Kaleem Shabazz said the tax burden is “unbearable.”

“We have to find a way to make it less,” Shabazz said. “It’s good that (the budget) went down, but it has to go down more.”

City Council must still approve the budget before it goes to the state Local Finance Board for adoption. A spokesperson for the Department of Community Affairs said Transitional Aid “must be resolved prior to the adoption of the budget.”

The council’s next scheduled meeting is Sept. 7, but there is no agenda yet for that meeting.

Other forms of state aid are committed as collateral for a $73 million state loan.

The city’s current state aid situation is reminiscent of last year’s budget woes. The 2015 budget was approved by the state with $33.5 million in anticipated casino funds that never came. That opened a hole in the budget and put the city at risk of running out of cash while fighting a state takeover.

“I don’t think we should basically move forward with a line item in the budget that does not have either something committed in writing or some type of credits set aside for the city,” said Councilman Frank Gilliam, who called for a public hearing on the budget.

Councilman Jesse Kurtz said he would like the state to “sign an affidavit that they’re going provide this pledged revenue.”

“Because last time they didn’t, and as far as I’m concerned they still owe us over $30 million from last year’s budget,” he added.

Councilman Moisse Delgado said he has “the smallest bit of trust that the state will provide the funds that we need.”

Meanwhile, former city Councilman Seth Grossman has a pending lawsuit against the city and state, claiming the city is violating state Local Budget Law. Grossman said a conference will take place Sept. 8, a day after the council’s next meeting.

“The proposed budget is in blatant violation of NJ Local Budget Law unless the state publicly certifies that all $106 million of anticipated state aid is firmly and irrevocably committed.” he wrote in an email.

Contact: 609-272-7215

Twitter @_Hetrick

Staff writer, politics

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