Atlantic City Mayor Don Guardian on Monday denounced a plan for the state to take sweeping control of the financially troubled city, saying the legislation would create a “fascist dictatorship” that would “trample” on the civil and constitutional rights of residents. During a news conference outside city hall, Guardian and other leaders in the Jersey Shore gambling resort town called on members of the state Legislature to change or reject the plan. They also said they’ve been working with state lawmakers on an alternative rescue bill that would give the city a greater say. And if all fails, City Council President Marty Small said, local officials might pursue action to stop the state plan. “This is an insult to democracy and to American citizens living in Atlantic City,” Guardian said of the legislation.
State Senate President Stephen Sweeney (D-Gloucester), the main sponsor of the state proposal, called the comments “the most childish act I’ve seen since I’ve been in government.” The rancor is the latest chapter in the ongoing saga of how to revive Atlantic City, which has given the state billions of dollars in tax revenue since casino gambling was legalized there 30 years ago but has seen four casinos close in recent years amid growing competition in neighboring states. The city’s tax revenue has been sliced in half because of the closings, and officials warn that the city could run out of money within weeks. Last week, Sweeney introduced a bill that would allow the director of the state Local Finances Board to take control over a number of city functions for five years, including renegotiating union contracts, restructuring the city’s debt, selling off city assets, and more. Sweeney — a likely Democratic candidate for governor next year — touted it as a “cooperation” between the state and city. But Guardian stressed Monday that the bill went much further than he expected, saying it is “far from a partnership.”
Guardian said his administration deserves to be more involved because it slashed $50 million from the city budget over the last two years and is open to making more cuts. He added that Christie twice rejected legislation that would allow casinos to make payments for 15 years instead of taxes — a move aimed to end costly tax appeals for the city. And, the mayor said, the state has yet to help mediate a $170 million tax appeal from the Borgata hotel and casino. Guardian said he believes the state taking over Atlantic City opens up the door to takeovers in places like Paterson and Newark. Brian Murray, a spokesman for Christie’s office, said Atlantic City’s leaders have been given more than five years “to deal with its excessive spending and structural budget deficits.”
Many people were surprised the Governor didn’t push for a cut in estate or inheritance taxes during his budget address. It had been such a hot topic last year. Then he’d hinted he might trade-off lower estate taxes for an increase in fuel taxes, an idea that went nowhere. Probably because the money state coffers would lose from fewer death taxes would be more than the increase in the gas tax. This year the Governor didn’t mention either tax and actually said there was no Transportation Trust Fund crisis. However, legislators from both parties know they must find money for TTF, and they’re still griping that so-called death taxes here are too much higher than similar federal taxes. In general, estate taxes come, literally, out of the estate a deceased person leaves behind, no matter who inherits what. There’s one exception. Spouses don’t have to pay New Jersey estate taxes. Inheritance taxes, on the other hand, are paid by individual heirs, except spouses and direct descendants, out of the share they receive from an estate. Many states have neither death tax and while some states have one or the other. New Jersey is one of only two states with both. New Jersey levies a tax on any estate valued at more than $675,000 while federal taxes don’t kick in until the estate reaches $5.3 million. Estates consist of cash, real estate, retirement and bank accounts, life insurance and other assets. Remax estimates an average home in New Jersey is worth $275,000. Add in a savings account, a car, some jewelry and insurance and you know estate taxes don’t affect only the top one percent. There were several pieces of legislation introduced last session but none were even seriously considered, and so far no others have been introduced this year. There are dozens of reasons retirees move out of New Jersey and death taxes may be one of them. So while they weren’t made a priority last week, I predict they soon will be.
As Gov. Chris Christie and Democratic legislators bicker publicly over the nearly broke Transportation Trust Fund, a top Republican assemblyman suggested on Friday that policymakers consider putting tolls on interstates 78 and 80 in New Jersey. Assemblyman Scott Rumana, the minority whip, said during a transportation policy event that tolls on the interstate highways might offer an alternative way to replenish the fund without increasing the state’s gas tax — or increasing it as much. Democrats have been pushing for a gas tax boost as the trust fund nears the end of its five-year authorization in June. The TTF finances road, bridge and other infrastructure projects throughout the state and will become merely a vehicle for paying back debt unless its gets another shot of revenue. The highways Rumana mentioned cut across New Jersey, from east to west, linking New York and Pennsylvania. Route 78 starts at the Holland Tunnel and Route 80 starts at the George Washington Bridge. Both are major routes for trucks carrying freight. Rumana said he realized that industry could be hurt by the tolls. But tolls on the interstates, he said, offer an obvious way to capture revenue from out-of-state travelers. Members of both parties whose districts includes communities near Interstate 78 said the idea was ludicrous and shouldn’t even be entertained. Perhaps the biggest question — beyond whether there would ever be enough political will in Trenton to put tolls on those highways — is if the state would even have the legal authority to put tolls on those roads. While the New Jersey Turnpike, which includes a portion of interstates 78 and 95, has tolls, it was grandfathered in when it became a part of the Interstate Highway System. The federal government long has had a prohibition on adding tolls to interstate roads, but has since allowed some states to pursue those revenue streams. New Jersey, though, would need to seek a waiver from the federal government.
With three new natural-gas power plants in the works, PSEG Power is not looking to add more generation in the foreseeable future. Ralph Izzo, chairman, president, and chief executive officer of Public Service Enterprise Group, said he does not anticipate any new investment in the conventional power business during the company’s quarterly earnings call with analysts Friday. PSEG Power’s natural-gas fleet will have more than 5,000 megawatts of capacity in 2016 — more than the nuclear units operated by the company, according to executives. The nuclear plants provide roughly half of the electricity used in New Jersey. The three new gas units include a 540-megawatt facility at its existing Sewaren site, which is expected to be operational in the summer of 2018. A 755-megawatt plant in Maryland is also scheduled to go into service that year, and a 455-megawatt natural-gas combined-cycle plant in Bridgeport, CT, is targeted to be operational in 2019. Together, the three gas plants represent an investment of $2 billion. Izzo also said that eventually, within a five-year time span, the company may retire its coal plant in Bridgeport when the new gas unit is built. But Public Service Electric & Gas, its gas and electric utility, will continue to be the main driver of profits for the Newark company, as it has for the past several years. The utility now accounts for 60 percent of the overall business and is expected to invest $8.3 billion over the next three years in resiliency and modernization projects.
Often lost in the ongoing debate over renewing New Jersey’s Transportation Trust Fund — which is on course to run out of money by this summer — is what the long-term vision should be for the state’s transportation network. Should bus and rail commutes into New York from New Jersey be made easier? Should light-rail lines in both North Jersey and South Jersey be expanded? And should a replenished Transportation Trust Fund also address highway congestion by eliminating chokepoints? A group of transportation experts and advocates answered “yes” to all of those questions during a recent roundtable discussion on transportation planning and funding that was hosted by NJ Spotlight. They also highlighted during the nearly four-hour event the quality-of-life improvements and economic benefits — both for the broader state economy and the individual homeowner — that would come from reinvestment in the state’s transportation network. Even as the experts and advocates listed their long-term goals — including a new Port Authority Bus Terminal and highways without the deep potholes that right now are costing motorists hundreds of dollars a year in repair costs — they also acknowledged the challenge of coming up with the cash that will be needed to fund that vision. Right now, the Transportation Trust Fund spends more than $3 billion annually counting federal matching dollars. But the trust fund is also deep in debt, and all of the state money that’s currently coming in from its primary dedicated source of revenue — New Jersey’s 14.5-cent gas tax — won’t be sufficient to fund new projects after June 30. All the panelists agreed that the current overreliance on borrowed funds is not a good model, and that the state should return as much as possible to the pay-as-you-go funding structure that then-Gov. Tom Kean Sr., a Republican, laid out when the trust fund was first created in 1984. Still, Gov. Chris Christie, a second-term Republican, left the door open to a gas-tax hike during his budget address before lawmakers in Trenton last week. He suggested to Democratic legislative leaders that he’s open to negotiating a bipartisan renewal plan before the June 30 deadline, as long as the Democrats also consider tax cuts somewhere else in the budget.