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Jersey City's skyline, shown here in a 2011 file photo, might change with the addition of North Jersey's first casino.

(Frances Micklow/The Star-Ledger)

The sad story of Atlantic City’s decline is not just about wealthy investors losing their shirts.

It is about thousands of middle-class families losing jobs in a region that already has the state’s highest rates of unemployment. It is about a hard-pressed city’s ability to hire the police and firefighters it needs to ensure basic safety. Unless the city’s luck changes, it could become Camden East before the decade is out.

Keep that in mind when mulling over the merits of the new proposal to build a giant casino and 95-story skyscraper in Jersey City, a $4.6 billion project that Mayor Steven Fulop believes could create 25,000 jobs. The draft plan also includes a giant stadium for car-racing events near Liberty State Park and the world's largest Ferris wheel.

No doubt, the project could be a boon to Jersey City and the region, assuming the details are handled with care. Liberty State Park is a jewel that must be protected. And any project this size could create transit nightmares.

But the big hurdle is that New Jersey voters in 1976 granted Atlantic City a monopoly on casino gambling in the state. So another amendment would be needed, requiring a vote of the Legislature and a referendum.

The expansion of gambling to northern New Jersey is inevitable at this point. Even South Jersey leaders who resisted that in years past — including Senate President Stephen Sweeney (D-Gloucester) and Sen. Jim Whelan (D-Atlantic) — now concede the point.

The reason is that the abundance of casinos built in neighboring states has already wrecked Atlantic City's monopoly. Gaming revenue in the city now amounts to about half of the $5 billion reported for 2006.

The challenge is to ensure that the expansion into northern New Jersey doesn’t sink another dagger into Atlantic City’s economy. The best hope is to divert a portion of the revenues from casinos in the north to help Atlantic City build its appeal as a family destination and reduce its dependence on gambling.

Las Vegas has managed to pull that off in the middle of a desert. With its ocean beaches, Atlantic City should be able to follow suit.

No doubt, this will spark political tension between north and south. But northern legislators should remember that revenue from Atlantic City’s casinos have supported the state budget for decades and have been directly invested around the state under the Casino Reinvestment Development Authority, helping to build landmark projects such as the New Jersey Performing Arts Center in Newark.

Also, Atlantic City’s reliance on casinos was an act of state policy in the first place. Once neighboring states joined the fray, that same policy helped set the stage for Atlantic City’s decline. So this problem is one that we all own.

Sen. Raymond Lesniak (D-Union) is pressing Democratic leaders to pass this amendment immediately so that it can be placed on the ballot this November. He says the investor, Paul Fireman, the billionaire founder of Reebok International, has agreed to pay a tax surcharge of $100 million to Atlantic City each year for a decade.

But the Constitution sets out a timetable for making changes, and Lesniak’s plan would require committee approval of a Constitutional amendment this week, while the discussion over this project is just starting. Key questions remain unanswered. How many casinos should be allowed in northern New Jersey? How much should they be taxed and how much should be diverted to Atlantic City? And how can that money be used most effectively to diversify the city’s economy?

The Jersey City plan will spark a needed conversation on all this. It holds promise. But a mad rush to embrace it as offered would be a mistake.

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