The near-bankruptcy of the financially ailing resort town was caused in part by the failures of casinos such as those previously owned by Donald Trump
Atlantic City may be forced by New Jersey into an unprecedented state takeover of its water as the result of a bailout, something experts have warned has worrying echoes of the ongoing water crisis in Flint, Michigan, and could result in price hikes.
The near-bankruptcy of the financially ailing resort town was caused in part by the failures of casinos such as those previously owned by Republican presidential nominee Donald Trump.
Casino closures over the past five years opened a cavern in Atlantic Citys budget, as property values plummeted and tax revenues plunged. However, Governor Chris Christie now also chair of Trumps White House transition team refused earlier this year to allow Atlantic City to formally go bankrupt to shed or restructure debt.
Instead, a harsh $73m bailout loan was signed by the city and state, which required Atlantic City to dissolve its independent water utility and hold the infrastructure as collateral for the bailout loan. Christie, a water privatization proponent, has said he would sell the citys assets if Atlantic City failed to meet its loan obligations, a promise that could result in a private company owning or leasing the citys infrastructure.
Separately, the Guardian can reveal that while two of Trumps Atlantic City casinos were under his control, the mogul failed to pay more than $146,000 in water bills between 2012 and 2014 until March this year.
Its highly unusual for the state to step in on a municipalitys finances at all, said Daniel J Van Abs, a Rutgers University professor and expert in water policy. The sort of deal that was established for Atlantic City is even more unusual, if you will. The notion that they should be required to privatize their utility I have not seen the state take that action previously.
Advocates of public water were blunt about the loans terms.
Its undemocratic and un-American, said Mary Grant, a water privatization expert at Food & Water Watch, an advocacy group that monitors corporate water takeover attempts.
The relationship to Flint is very compelling, Grant said. An emergency manager came in and made decisions about the water system against the wishes of the local elected officials, and that resulted in the Flint water crisis, because they put money before health and human lives.