Atlantic City's Emergency Management Team Rules Out Bankruptcy, But Warns Of Layoffs To Balance City Budget

By Cleve Bryan

ATLANTIC CITY, N.J., (CBS) -- Atlantic City's state-appointed emergency management team has ruled out bankruptcy but warns of wide-spread layoffs to balance the city budget.

Emergency Manager Kevin Lavin issued a 60-day report on Tuesday which called Atlantic City's financial crisis a lot more severe than originally anticipated.

Casino closings and property tax reassessments by those that remain have decimated the tax base with property values this year alone dropping by 35 percent.

To help close a $101 million budget shortfall this year the report recommends delaying pension and benefit payments as well as laying off 20-30 percent of the city's workforce, which now stands about 1,100 employees.

Lavin says that bankruptcy and raising taxes are not part of the plan to improve the city's financial woes.

Democrats criticized the report for not including more creative and specific budget proposals.

New Jersey Assemblyman Vince Mazzeo (D-Atlantic County) says the state should proceed forward with a package of bills to stabilize taxes including a measure that has casinos make set payments to the city rather than pay regular property taxes.

"This report didn't tell me anything that I didn't know," says Mazzeo, "the Governor should have enough information now to sign our reforms."

Plans are to issue a second report in June, after negotiations with major players including elected officials, labor unions and the casinos.

KYW Newsradio's David Madden contributed to this report.