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    Entries in New Jersey (9)

    Tuesday
    Nov082016

    New Jersey Voters Refuse to Build Casinos Outside Atlantic City

    With Atlantic City in financial crisis because of casino closures, the state's voters aren't willing to take any more gambles.
    BY  NOVEMBER 8, 2016

    Atlantic City will keep its monopoly on New Jersey's gambling industry. Voters overwhelmingly rejected a ballot measure that would have added two new casino sites in the northern part of the state.

    The results are a rare win for the struggling seaside resort town, which has met repeated disappointment in recent years as casinos have closed and pushed the city into a fiscal crisis.

    In the weeks leading up to the vote, polling showed the measure headed for defeat. With about half of precincts reporting on Tuesday night, results showed the referendum failing 78 percent to 22 percent.

    Although the measure said about one-third of any new casino revenue would have gone to Atlantic City for 15 years for economic revitalization, opponents said they doubted the revenue-sharing proposal would generate enough money to make a difference. Opponents included casino worker unions and Atlantic City-area stakeholders.

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    Tuesday
    Oct042016

    Is Ending Atlantic City's Casino Monopoly Worth the Gamble?

    The closure of casinos in Atlantic City has left the municipality in financial crisis. Now New Jersey wants to build more in other places.
    BY  SEPTEMBER 8, 2016

    A proposal to end Atlantic City’s casino monopoly in New Jersey would spell the end for the struggling seaside resort town. At least that's what opponents of the idea say.

    Backers of the ballot measure, however, say it's the city's best hope for revitalizing its downtown and diversifying its economy beyond gaming.

    This November, New Jersey voters will decide whether to allow two new casinos to be built in the state. About one-third of any new casino revenue would go to Atlantic City for 15 years for economic revitalization.

    The vote comes as Atlantic City, once the East Coast’s gaming capital, has struggled in the face of increased competition in neighboring states. In the past 15 years, more than a dozen casinos have opened in Maryland, New York and Pennsylvania

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    Friday
    Aug122016

    The Week in Public Finance: Why Some Pensions Are Falling Behind, Stress Testing States and More

    A roundup of money (and other) news governments can use.
    BY  AUGUST 12, 2016

    Pollyannaish About Pension Returns

    Houston is fighting a losing battle with its pension system: The unfunded liability between Houston’s three plans totals at least $3.9 billion, up from $212 million in 1992. Meanwhile, pension costs as a percentage of the city’s revenue have doubled since 2000 and were one of the reasons behind a recent credit rating downgrade.

    new report from Rice University’s Kinder Institute identifies two main culprits for the funding crisis: Even though the city is now paying its full pension bill, it’s still not enough to chip away at the unfunded liability, and the three plans have assumed investment returns of between 8 and 8.5 percent -- that's higher than the national average and even higher than their own recent experience.

    The report's authors looked at examples of pension changes in other major cities and highlighted potential solutions, including raising the cap on the city’s revenues so it can generate more money for pensions; increasing employee contributions; and reducing cost-of-living payments to retirees. “All of these options would generate different amounts of funding in different time frames,” the report said. "[But] none would likely solve the problem alone.”

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    Thursday
    Aug112016

    The Benefits of Helping Struggling Cities

    For financially distressed municipalities, it’s good to be in a state that intervenes, according to a new study.
    BY  AUGUST 11, 2016

    Earlier this month, New Jersey stopped Atlantic City from defaulting on its debt with a $74 million bridge loan. While there was plenty of bluster and several hollow threats from legislators that they would not step in to help the financially beleaguered gambling town, it didn’t surprise anyone when they finally did.

    That’s because New Jersey has a reputation in the credit market for going to any lengths to prevent one of its municipalities from entering Chapter 9 bankruptcy. In fact, no New Jersey municipality has defaulted on debt since the Great Depression. This extra layer of protection is not only comforting to local officials in struggling cities like Camden or Trenton, it’s viewed as a big plus by those who invest in New Jersey municipal debt.

    Now, preliminary research affirms the benefits of being a municipality in a more proactive state. Scholars at the University of Notre Dame and University of Illinois at Chicago have found that creditors tend to give municipalities in these states a slightly lower borrowing rate than they do municipalities in states without any kind of bankruptcy intervention program.

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    Friday
    Jun102016

    The Week in Public Finance: Punishment for Illinois, Budget Battles and New Jersey's Win

    A roundup of money (and other) news governments can use.
    BY  JUNE 10, 2016

    A Battle Over Illinois’ Downgrade

    Illinois was downgraded this week to two steps above junk status by Moody’s Investors Service. The downgrade is largely due to the state’s inability to pass a budget for the past year and a half. A political stalemate has crippled lawmaking in the state and Illinois -- already the lowest-rated state -- is being docked now with a Baa2 rating. The state’s current budget gap has only worsened over the past year. The structural budget deficit, including what Illinois is supposed be spending on pensions but isn’t, amounts to 15 percent of total general fund expenditures, Moody’s said. A day after the Moody's downgrade, Standard & Poor's also downgraded Illinois.

    Apparently unperturbed by the fact that its overwhelming debt is what got it into this pickle, Illinois plans to borrow a half-billion in bonds later this month. The downgrade will likely increase the interest rate Illinois will have to pay on those bonds and impact the state’s outstanding $26 billion in debt.

    Not long after the downgrade, the world’s largest money manager said investors should boycott Illinois’ upcoming sale.

    “We as municipal market pa

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