Moody's Investors Service announced Wednesday that it had downgraded Atlantic City's credit rating from Baa1 to Baa2 and its outlook for the city was negative.
According to the report, $219 million of "outstanding general obligation and city-guaranteed bonds" is affected by the downgrade. Moody's said the downgrade illustrates the city's diminished tax base resulting from "ongoing casino revenue declines and sizable casino tax appeals," which are attributed to heightened competition from out-of-state casinos.
The city's debt burden, percentage of tax base controlled by the gaming industry and poor socioeconomic climate also contributed to the downgraded credit rating.
The report concludes that the forecast doesn't look bright either for Atlantic City, as a combination of ongoing tax appeals and casino revenues continuing to fall will "further strain the city's weak financial position and increase its debt burden to above-average levels."
The downgrade comes as mayor-elect Don Guardian, a Republican who has served as the director of the Casino Reinvestment Development Authority's special improvement district since 2011, met with state Senate president Steve Sweeney (D-West Deptford) Wednesday for a business lunch at the city's famed White House Sub Shop.
Speaking to reporters after the meeting, both Guardian and Sweeney pledged to increase communication between the city and the state and work to redefine the shore resort as multidimensional destination.
"The chapter of casinos as a monopoly is over," said Guardian, who defeated incumbent Democrat Lorenzo Langford earlier this month.
Sweeney said that for decades, the rest of the state depended on Atlantic City to generate revenue. Now it's time for the state to offer its hand.
"We can't afford to have this community fail," Sweeney said.