Atlantic City faces civil action suit filed by New Jersey governor's admin following school district payment
Apr 07, 2016 12:19 PM EDT
The administration of the New Jersey governor filed a civil action suit against Atlantic City forcing the local government to pay the owed money to the school district. The Attorney General's office filed the lawsuit on behalf of Education Commissioner David Hespe in Atlantic County Superior Court.
According to the legal action, State Education Commissioner David Hespe stated, Atlantic City owed the school district worth of $82 million of tax revenues for the school year. The city already paid a total of $48 million, however, it still has to pay $34 million which is due in July 15, Reuters reported.
The lawsuit went on, "As of April 1, the city had only $8 million of cash available for operations. Second-quarter tax collections that begin in May will not provide enough to fund required disbursements." New Jersey Governor Chris Christie is now seeking an order to block the city from spending funds until payments are made to the school district.
Christie said that the Atlantic City plans to make a payroll payment Friday before running out of money for three weeks. He stated at a news conference Monday that he wants the court to act before Friday, Politico New Jersey reported.
Department of Education spokesman David Saenz also said that they aimed to protect property tax collections that rightfully belong to the Atlantic City School District. The complaint also added that without the said owed payments, the city's school district will not be able to operate as well as provide salaries for teachers, health benefits, private school placements for students with disabilities, charter school payments, facilities costs and other expenses.
Regarding the payment issues, in New Jersey, municipalities must act as collection agents by collecting property taxes on behalf of school districts and transmitting the money to them before the set deadline, wrote NJ True Jersey.
The lawsuit names the City of Atlantic City, Mayor Don Guardian and the City Council as defendants. Still, the city expects to run out of money in June and may not be able to regain its solvency without further action.