ATLANTIC CITY — The diversion of $22 million in casino tax revenue away from the Casino Reinvestment Development Authority is helping city finances, but it’s also led CRDA to cut its full-time staff by 15 percent.
Chris Howard, executive director of the state agency, announced the cuts Thursday afternoon, saying they were part of an agency reorganization. He declined to say exactly how many people would be laid off or from what departments.
“Notwithstanding these changes, the CRDA remains charged with advancing the core objectives of the Tourism District Act,” Howard said in a statement.
Recently the authority stopped receiving casino investment alternative taxes as a source of funding, all but eliminating its role in bankrolling future development.
State Sen. Jim Whelan, D-Atlantic, said he heard about the news when a friend told him she had lost her job at the agency.
“I was shocked when I heard about it,” Whelan said. “I don’t know what departments were affected, but it’s left me scratching my head.”
Since its creation, the CRDA has invested $1.85 billion in Atlantic City through April 19, 2016, according to an analysis by The Press of Atlantic City of 454 resolutions passed by the authority. Overall, CRDA has invested $2.2 billion since its inception, including $374 million spent outside the city.
“We have adjusted financially to accommodate the reduction in investment alternative tax revenues, which have been redirected in part to pay the bond debt service of Atlantic City,” Howard said.
The alternative tax represented about 30 percent of its budget. That money, derived from a 1.25 percent tax on gross gaming revenue and a 2.5 percent tax on internet gaming revenue, will now go to the city to help pay off its more than $500 million in debt as part of a state rescue plan.
Assemblyman Chris Brown, R-Atlantic, criticized the layoffs.
“Middle-class employees facing layoffs from a politically connected insider making $175,000 per year is another unfortunate consequence of the elimination of the funding,” said Brown referring to Howard’s yearly salary.
Howard took over as executive director in January after John Palmieri stepped down.
Former agency head James Kennedy also questioned the state agency’s decision to cut staff.
“The mission of CRDA is completely different than when I was there, but given the condition of the city, it’s probably not the best idea to downsize the redevelopment agency,” Kennedy said.