Atlantic City makes bond payment, avoids default

The latest AC casino casualty is...
The latest AC casino casualty is...

Atlantic City made its $1.8 million bond payment, managing to avoid default.

Last week, it wasn't clear at all that the city would make the payment, which was due today. The office of Mayor Don Guardian said last week that the city might not have enough money to make the bond payment and pay for civil services.

Guardian's spokespeople have yet to say how or whether the payment will affect the rest of Atlantic City's payments.

On Monday Guardian said the city is "running on fumes," with a $33.5 million budget hole. The problems, he said, are due to a string of casino closings, debt stemming from "bad decisions by all levels of government" and the lack of a rescue bill from the state "that would infuse much needed revenue."

Related: Atlantic City teeters on the brink of default

Atlantic City was once a gambling mecca on the Jersey Shore. But four casinos closed in 2014, a third of its total, wiping out 70% of the city's tax revenue. The city has been scrambling for cash to pay its workers, including cops, firefighters and teachers.

Gov. Chris Christie and the mayor are locked in a nasty feud over city finances that degenerated into a lawsuit. Earlier this month, the state sued the city to force it to pay its teachers before other city workers, because it didn't have enough money to pay everybody.

The city was facing a temporary shut down due to lack of funds. But the city council kept basic services functioning by switching its employees to a monthly pay schedule.

Moody's recently downgraded the city. New Jersey lawmakers, motivated by fears that a city default could cast a pall over the entire state, are considering two bills to help the city restructure its finances.

Guardian said on Monday that he opposes any sort of state takeover as "draconian" and "unconstitutional."

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