ATLANTIC CITY, N.J. (AP) – New Jersey municipalities cannot establish needle exchange programs because they would violate state drug laws, an appeals panel ruled, delivering another setback to programs planned in Atlantic City and Camden.

Atlantic City’s plan – however well-intentioned – to pass out clean needles in hopes of stemming the use of dirty ones by intravenous drug users does not exempt city employees from a nearly 20-year-old set of drug laws, the court said in a unanimous ruling written by Judge Stephen Skillman.

“We recognize that many people believe that needle exchange programs such as the one adopted by Atlantic City serve a vital public interest in reducing the transmission of the HIV virus and other blood-borne diseases without increasing illegal drug use,” Skillman wrote for the three-judge Appellate Division panel.

“We also recognize that there are scientific studies supporting this viewpoint. However, Atlantic City and its employees are not exempt from the Code [of Criminal Justice] provisions prohibiting the possession, use and distribution of drugs and drug paraphernalia simply because they adopted a needle exchange program for beneficent reasons,” the decision states.

The ruling is the second recent setback for needle exchange advocates and means New Jersey will remain one of only two states without a method to legally provide clean syringes to drug users.

On June 17, the Appellate Division stayed an executive order issued in October by then-Gov. James E. McGreevey that would have allowed up to three cities to establish experimental needle-exchange programs. That case centers on whether McGreevey had the authority to permit the programs.

Camden’s needle exchange program, which also was approved by McGreevey’s executive order, has yet to begin operating, according to Ron Tomasello, a spokesperson for Camden County government, which was to oversee it through its health department.

Critics of the programs welcomed the ruling; supporters said they were not surprised by it.

“The good guys won one,” said Assemblymember Joe Pennacchio, R-Morris, an opponent of needle exchanges. “It was a victory for common sense. Our efforts should be maintained at stopping drug abuse, not enabling drug abusers by giving them needles.”

Intravenous drug users account for more than half of New Jersey’s 62,000 AIDS and HIV cases.

According to Atlantic City officials, the problem is even more acute in the casino capital, where one in 32 black people have HIV.

“All I can say is it’s a classic case of public health versus law enforcement,” said city Health Officer Ronald Cash, a vocal advocate of the idea. “I think health is equally as important as law. It’s a crisis in Atlantic City. We have to do something creative to handle it. Public health should be bigger than politics,” said Cash, who is also director of the city Department of Health and Human Services.

But critics say the programs would put government in the business of supplying drug users, effectively condoning illegal drug use. Efforts to legalize needle exchanges in New Jersey have failed in the Legislature.

The ruling stemmed from a 2004 city ordinance approving a needle exchange program in the city. Atlantic County Prosecutor Jeffrey Blitz went to court to halt the program and then won a ruling last September that said it would violate drug laws if enacted.

The city appealed, and the appellate panel’s decision upheld the ruling. Bob Sandman, the city’s attorney in the case, said no decision had been made whether to again appeal.

Roseanne Scotti, director of the pro-needle exchange Drug Policy Alliance, said she hoped the city would. New Jersey and Delaware are the only two states that do not have needle exchange programs and do not permit non-prescription sales of syringes.

“The tragedy of this all is that New Jersey is so far behind the curve. Every week and year we wait, more people get infected and more people die. The issue here is that we do have a public health emergency. Unfortunately, the Legislature has not yet chosen to act,” Scotti said.