Hillary Clinton loves to criticize Donald Trump’s management of his Atlantic City casinos. However, The Wall Street Journal posted an article on Wednesday that gives a more complete picture of exactly what happened there. Evidently Democratic policies in Atlantic City and New Jersey played a major role in the events there.
The article reports:
In 1976 New Jersey voters approved a referendum that legalized gambling in Atlantic City. The constitutional amendment required casino revenues to fund programs for senior citizens and disabled residents, but politicians have instead funneled the cash to favored projects and businesses under the guise of promoting development.
…A 1984 law required casinos to pay 2.5% of gaming revenues to the state or “reinvest” 1.25% in tax-exempt bonds issued by the state Casino Reinvestment Development Authority for state and community “projects that would not attract capital in normal market conditions.” Investment recipients have included Best of Bass Pro shop, Margaritaville and Healthplex.
A decade later, state lawmakers imposed a $1.50 fee (which has since doubled) on casino parking spots to fund Atlantic City transportation, casino construction and a convention center. In 2004 lawmakers added a $3 surcharge for casino hotel stays to finance new hotel rooms and retail establishments, which had the effect of promoting unsustainable commercial and casino development.
As the cost of operating the casinos rose (thanks to the policies of the state–run by the Democrats), other states legalized gambling–Connecticut in 1992 and Pennsylvania in 2004. Atlantic City not only lost its monopoly–but the cost of running the casinos increased significantly.
The article further reports:
Irony alert: Mr. Trump in 1997 sued to block the state’s redistribution of casino income when a competing developer stood to benefit from its investments. However, New Jersey’s liberal Supreme Court ruled that voters should have known that the referendum was actually intended to revitalize Atlantic City tourism, not help seniors.
The article concludes:
Employment in Atlantic City has declined by about 10% over the last decade. Since 2010 the city’s property tax base has shrunk by two thirds. Local politicians raised property taxes by 50% between 2013 and 2014 to compensate for the dwindling tax base, but this has merely deterred new business investment and propelled flight.
Meantime, local politicians have continued to spend like they work for Google. Between 2010 and 2014, expenditures increased by 10% while government debt doubled. The city government spends about $6,600 a year per resident—more than any other city in the state including Newark ($2,344). Its budget exceeds that of nearly half of New Jersey’s counties. Labor costs constitute about 70% of the budget.
Earlier this year, the city emergency manager projected a $393 million cumulative deficit over the next five years absent reforms. More than 100 workers have recently been laid off. In May Democratic legislators and Governor Chris Christie passed a bailout that allows the city to squeeze an additional $120 million out of casinos in revenues annually to compensate for lower property-tax revenue.
To sum up: New Jersey Democrats plundered Atlantic City casinos, redistributed the spoils and loaded up the city with unaffordable levels of debt. The gambling mecca is a five-star example of failed liberal policies.
This sounds like Detroit. This is what we are in for if we put Hillary Clinton in the White House and allow Democratic policies to control our economy. I need to mention that in both Atlantic City and Detroit, had the free market been allowed to operate without union and government interference, the industries involved might have been flexible enough to deal with the competition. Because of government interference (and in the case of Detroit, greedy union bosses), the cities went from prosperous and flourishing to poor and decaying.