Chris Christie has an Atlantic City problem.

Casinos on the famed boardwalk are failing. The crime rate is one of the highest in the state. And now the New Jersey governor’s decision to bring in an emergency manager to turn things around has created a nasty political backlash.


It’s the latest in a series of home-state setbacks for Christie as he contemplates a potential bid for the Republican presidential nomination in 2016. Beyond Bridgegate, a recent Rutgers Eagleton poll shows Christie’s personal favorability rating is now at a new low of 37 percent.

The governor’s potential primary opponents are watching closely and plan to highlight New Jersey’s fiscal woes if Christie winds up in the race.

“The problem of Atlantic City is not all Chris Christie’s fault, as the gaming industry has been eviscerated,” said Brigid Harrison, political science and law professor at Montclair State University. “But why Atlantic City matters for him running for president is that South Jersey has lost 10,000 jobs, and that kind of drain means other statewide economic indicators are dropping, and his primary opponents can very easily use those against him.”

Wealthy donors around New York and New Jersey often cite economic problems under Christie’s watch as a reason to line up behind other presidential hopefuls. These donors fear that Christie will face a barrage of negative ads about his economic stewardship. And political consultants say they are right to worry.

“The opponents’ campaign can make a pretty nasty TV commercial with pictures of the ‘meaner streets of Atlantic City,’” said Dan Schnur, a former aide to John McCain’s 2000 presidential race who is now executive director of the Institute of Politics at the University of Southern California.

New Jersey is facing an estimated $3 billion budget gap in fiscal 2015 and has had three consecutive years of revenue shortfalls driven by “optimistic assumptions and a lagging economic recovery,” according to the rating agency Moody’s Investors Service. The same agency dropped the state’s credit rating three times in the past year, meaning it has lowered New Jersey’s rating a total of six times since the start of Christie’s tenure.

The problems now center on Atlantic City, where Christie made a hard — and unpopular — choice last month bringing in attorney Kevin Lavin as emergency manager for the struggling vacation destination.

The backlash started immediately.

Democratic New Jersey Sen. Stephen Sweeney said he would start a “big fight” against the decision and rating agencies dropped the city’s credit rating and said an emergency manager was a negative for all of the state’s municipalities.

The decision also promises to be unpopular on a local level: Top city officials had rejected the idea of bringing in outside help mere weeks before Christie’s announcement.

Furthermore, emergency managers are often synonymous with budget cuts and broken cities. Think Detroit.

The politics could cut two ways, analysts say.

Christie could win praise for making tough calls to save Atlantic City. Or it could just be another reminder of the state’s many problems under his watch.

“To me, it just bolsters [Christie’s] image of making tough decisions and demonstrating leadership,” Matt Mackowiak, a Republican strategist and president at Potomac Strategy Group, said. But Mackowiak and others said Atlantic City also presents “a real political problem” for the governor.

The city’s woes are mounting. Four of its 12 casinos closed in 2014, leaving many Atlantic City residents unemployed. A rising unemployment rate — 17.8 percent — is hurting the state’s ability to lower its own rate. New Jersey’s unemployment rate of 6.2 percent is above the 5.7 percent national average. Atlantic City also has a public safety problem: Its violent crime levels are among the highest in New Jersey.

The city’s contribution to state coffers is also dropping fast, a tough hit for a state already facing its own financial crisis. All these problems give other 2016 candidates plenty of ammunition against Christie.

Atlantic City’s problems started several years ago when it lost control of its gaming monopoly on the East Coast. Pennsylvania legalized gambling in 2004, and the new casinos stole Atlantic City’s vacationers and tourism revenue.

The Atlantic City Governor’s Commission’s report showed that casino revenues dropped from $4.9 billion in 2006 to $2.9 billion in 2013, and the report cited competition from new casinos as a main driver.

The blow’s financial impact was exacerbated by the financial crisis and subsequent recession, and Hurricane Sandy destroying a large amount of Atlantic City’s boardwalk.

The battle for tourists is only going to get worse.

Earlier this year, New York said it was going to open three casinos, and murmurs about a new casino in northern New Jersey around the Meadowlands in Bergen County began over the summer.

“Atlantic City’s economy is all built on gaming, and when that industry goes away, when a competitor opens in your backyard, that can be devastating to the local economy as well as [to local] property taxes,” Tracy Gordon, a senior fellow at the Urban Institute’s Tax Policy Center, said.

The impact on taxes is crucial, because Atlantic City gets almost all its cash from property taxes, accounting for 81 percent of its revenue in fiscal 2014.

Casinos have paid 75 percent of the city’s property taxes until recently, according to Michael Stinson, director of revenue and finance for Atlantic City. He said less than 60 percent of Atlantic City’s property tax revenue now comes from casinos, and he estimates it will fall to below 50 percent soon.

One major impact of the casino closings is a shift in the property tax base, from Atlantic City business owners to residents, many of whom lost their jobs when the casinos began closing.

Nancy Mantell, director of Rutgers Economic Advisory Service, forecast at a December conference that the casino closings will cost New Jersey 11,000 direct jobs.

“You will have major consequences for family incomes and property, [and] one can only assume, a rise in foreclosures,” Gordon MacInnes, president of New Jersey Policy Perspective, said. “One thing people surviving in Atlantic City on $30,000, $40,000 a year don’t need is a rise in property taxes by hundreds of dollars.”

Two main headline risks Christie faces are potential clashes between the emergency manager and the city officials’ solutions for violent crime, and whether the city coming so close to bankruptcy while under Christie’s supervision puts the governor’s fiscal record in doubt.

Atlantic City has one of the highest crime rates in New Jersey, with 4,287 crimes in 2014, 522 of which were violent, according to the New Jersey State Police’s website.

Crime levels are falling, dropping by 13.6 percent in the past year, but think tank and policy researchers list it as one of the main impediments to the city’s recovery as a tourist haven. The city’s budget cuts also led to reductions to the police department.

“We went from 330 to 285 police officers, then brought in new technology to change the way we do deployment to provide better services,” Atlantic City Mayor Don Guardian said, adding that the changes are reducing the cost of policing by $15 million.

But it’s the city and state finances that may represent the most trouble for Christie, whose allies argue that he inherited a state in bad fiscal shape.

Michael DuHaime, top political adviser for Christie and manager at Mercury Public Affairs, was quick to point out that unemployment was at 9.7 percent when Christie first took office in 2010, and he has added 151,700 private-sector jobs since then.

“I think you have to look at where New Jersey started. New Jersey was economically a wreck; Christie inherited an absolute mess,” he said.

DuHaime also pointed toward the state Democratic legislators, saying they have stopped Christie from cutting income taxes and enacting some structural reforms.

Still, the state’s recovery, especially from the financial crisis, has been described as “laggard” by rating agencies.

“Christie will have to argue about improvements rather than raw numbers,” Schnur said. “Even though there has been a good amount of progress, it’s not going to be able to match up in overall job creation with other governors in the race, but he can make the argument about progress.”

Potential rivals like former Gov. Rick Perry of Texas and Gov. Mike Pence of Indiana will have better jobs numbers to tout. Texas’ unemployment rate is below the national average at 4.6 percent, and it has the highest credit rating offered, though the ongoing decline in oil prices could cause the state some problems in the near future.

Indiana’s unemployment rate is also solid at 5.8 percent, and it also has the highest credit rating offered.

Schnur pointed out that Atlantic City’s problems do not translate directly to voters in key voting states like Iowa or New Hampshire.

“Everyone sits in traffic and gets mad about it, but very few people have large casinos in their neighborhood,” he said.

CORRECTION: An earlier version of this story misstated Atlantic City’s crime-rate ranking among New Jersey’s cities and the number of crimes reported in the city in 2014.

CORRECTION: Corrected by: Trevor Eischen @ 02/15/2015 03:11 PM CORRECTION: An earlier version of this story misstated Atlantic City’s crime-rate ranking among New Jersey’s cities and the number of crimes reported in the city in 2014.