Four major casinos are shuttered in Atlantic City, depressing the local and state economy.

Four major casinos are shuttered in Atlantic City, depressing the local and state economy.

When gambling was legalized in New Jersey in 1976, Atlantic City was touted as an economic dynamo that would be a financial boon to the state.

The goal, according to Barbara Kozek, writer for the official Atlantic City website, was for the casinos to “use the glorious resources it has been given by nature, to make it once again a world renowned tourist Mecca.”

But the casinos never brought the revitalization that the state hoped, and when gambling was legalized elsewhere –such as Connecticut, Delaware and Pennsylvania– Atlantic City struggled to keep up.

The VOICE interviewed several local business owners in Atlantic City to get their perspective.

John North, an employee at “Seafood Raw Bar” for 34 years, describes the situation in Atlantic City as “worse than ever.” He says “People don’t want to spend money.”

Sherry Gliksman, who has worked at the Haunted Coffin Ride located on the boardwalk for the past 3 years, says that the closing of the casinos means less foot traffic on the boardwalk and that has a negative impact on all the businesses, including her own.

Four of the twelve major casinos in Atlantic City — Showboat, Revel, the Atlantic Club, and Trump Plaza — closed their doors in 2014.

What many New Jersey residents don’t realize, however, is that the bad news for Atlantic City is bad news for all of us, particularly at the community colleges.

Mercer draws its funding from three primary sources: state support, county support and student tuition. Ideally, a third  would come from each segment, but the state is pulling less and less of its weight.

In 2006 Mercer was receiving 19 percent of its funding from the state, now it’s down to just over 12 percent.

At the same time average in-state two year college tuition prices increased by 2.83 percent in the last year.

According to the 2014 Tourism Economic Impact Study, the revenue from gaming declined 4.5 percent in 2014. The tourism industry contributed with 6.6 percent of the state revenue in 2014.

Some other large Atlantic City entities, such as Ceasars Entertainment and Trump Taj Mahal, just narrowly avoided the same fate as the four closed casinos by either selling their properties or taking large loans in order to stay up and running. Some have even considered renting out space to community colleges, but the spaces aren’t easy to convert.

In an article on Atlantic City’s decline from The New York Times, by Jon Hurdel, that was published on August 19, 2014, he quoted Paul Steelman, principal of Steelman Partners, a Las Vegas-based architecture firm for the entertainment industry, who said that ““Casinos are not great conversions to other uses…They are custom-designed buildings that are very expensive to operate and maintain.”

Since the state collects an 8 percent tax on gambling from the city, each property in distress stresses the overall economic health of the state.   

In recent phone interview with The VOICE, Mr. Jacob C. Farbman, Director of Communications at NJ Council of County Colleges said that “when we lose any business in New Jersey it impacts revenues that the state collects in taxes and those revenues go right into the State general fund.”

Farbman continued, “We know right now the student tuition covers most of the cost of a community college education and that’s because the state budget is in bad shape. Higher Education has been underfunded for several years now. So it is almost like a perfect storm where we have all these services that we need that are dependent upon revenues and state resources, yet people have no money to pay more in taxes.”

Mercer’s outgoing president Dr. Patricia Donohue told The VOICE:  “Atlantic City is probably connected to some of [the tuition increases] but it is also just a sign of our times.”

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Michael Naples

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