Atlantic City’s financial distress is negatively affecting Atlantic County, Moody’s Investor Services said Friday.
Funding losses from Atlantic
City, which makes up nearly a quarter of the county’s tax base, will
require the county to make tax increases or spending cuts, Moody’s said
in its weekly credit outlook.
Atlantic County has an Aa2
negative debt rating, according to Moody’s. Atlantic City’s rating is
Caa1 and is being reviewed for further downgrade.
Atlantic County’s tax base fell
to $36.6 billion in 2015 from $58.2 billion in 2008, Moody’s said. Over
the same period, Atlantic City’s fell to $8.4 billion from a high of
$22.2 billion, the report said.
“As a result, the city’s contribution to the county’s share of property taxes has shrunk,” Moody’s said.
Despite the resort’s recent turmoil, the county still has options to remain fiscally healthy, Moody’s said. Budgets with cost-cutting steps and tax increases would help offset delays or declines in Atlantic City’s contribution to county finances, the report said.
“But timing and details are uncertain, providing no clarity for the county’s budgeting process,” Moody’s said
Despite the resort’s recent turmoil, the county still has options to remain fiscally healthy, Moody’s said. Budgets with cost-cutting steps and tax increases would help offset delays or declines in Atlantic City’s contribution to county finances, the report said.
Moody’s also said the county could benefit if legislation passes allowing the state to further intervene in the city's finances.
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