A day after Gov. Chris Christie rejected a package of rescue bills designed to provide financial aid to ailing Atlantic City, officials from the Jersey Shore gambling resort said they are considering asking the state to let the city file for bankruptcy. It’s the latest development in an ongoing battle over how to save Atlantic City, which has seen four casinos close and more than 10,000 jobs lost over the last two years amid ever-growing competition from gambling halls in nearby states. Mayor Don Guardian said he will hold an emergency meeting with the city council next week to discuss the prospects of bankruptcy. “It would be good from a financial point for Atlantic City to file bankruptcy,” Guardian said at the Statehouse after meeting with state Assembly Speaker Vincent Prieto about the resort’s troubles. “We’d come out with a clean slate.”
But whether Atlantic City would even be allowed to file for bankruptcy is uncertain. The state must approve such a move, and Christie has been talking with top New Jersey lawmakers about a plan to avoid bankruptcy by having the state take over the city’s finances. Guardian and city officials have opposed a takeover, saying they don’t trust the state’s ability to handle the matter. But some New Jersey leaders say the state needs to assume control because the local government hasn’t done enough to combat its money problems. Such a takeover seemed more likely Monday after Christie vetoed three bills aimed to give a boost to the city — even though they included changes that he asked the state Legislature to include. The measures would have let Atlantic City’s casinos make payments in lieu of taxes for 15 years, as well as redirected casino investment taxes and marketing money to help the resort erase debt.
The move left Atlantic City with a $33.5 million hole in its municipal budget. And emergency manager appointed by Christie said in his final report released Friday that the resort could run out of money by April without the aid. Kevin Lavin’s report, however, stopped short of suggesting bankruptcy. Instead, it recommended both massive cuts and a proposal for the city to regionalize or privatize government departments. City Council President Marty Small suggested Christie vetoed the aid package to push along takeover legislation introduced by state Senate President Stephen Sweeney. If approved by the state Legislature and signed by the governor, the plan would allow the state to assume control of the city’s finances for 15 years. “Atlantic City government has been given over five years and two city administrations to deal with its structural budget issues and excessive spending. It has not,” Roberts said in a statement. “The governor is not going to ask the taxpayers to continue to be enablers in this waste and abuse.”
Sweeney (D-Gloucester) said Wednesday that the mayor’s bankruptcy suggestion is “the worst possible outcome for Atlantic City and for the state of New Jersey.” He said it could hurt New Jersey’s other cities and result in credit downgrades and higher costs, as well as damage to the city’s schools. “My goal is to save Atlantic City and to avoid bankruptcy,” Sweeney, a likely Democratic candidate for governor next year, said in a statement. “That is why state intervention is the best way to bring the city’s finances under control and why swift action is needed. Too much time has been lost to inaction and denial.”
Will this be the year that state lawmakers finally solve New Jersey’s transportation funding crisis? It’s been known for years in New Jersey’s political circles that the Transportation Trust Fund (TTF) is on pace to run out of money for capital projects on June 30, the end of the current fiscal year. Lawmakers have repeatedly claimed that a plan to replenish the fund was coming, but a plan has yet to be revealed. It looks like we may finally be getting somewhere though. Last week, top Democrats in the Legislature said a funding solution announcement really is imminent now. State Sen. President Steve Sweeney and Assembly Speaker Vinnie Prieto said they continue to work together on a TTF plan, and they have been for some time. When asked when the pair would go public with their proposal, Sweeney said the end is near.
“I’m going to sit down with him (Prieto) because we really are very close,” said Sweeney (D-Thorofare). “I know everyone keeps saying it, but we really are.” The final sticking point, according to Sweeney and Prieto, is how much funding would be done through borrowing and how much the state would pay. Any plan would require the agreement of Gov. Chris Christie. “It really takes three to tango on this one,” said Prieto (D-Secaucus). There is another issue. Christie is running for president and is not likely to agree to a gas tax increase, which Prieto and Sweeney admitted is almost sure to be included in their plan. “One of the biggest concerns I have is he (Christie) has signed a pledge of no taxes. We don’t want taxes either, but we can’t ignore the fact that you actually have to fix the roads and bridges and it’s going to cost something somewhere,” Sweeney said. “No one is going to fix the bridges with a wand. We really, truly believe we need a $2 billion (a year) transportation plan.”
Several times in the recent past, the governor has said everything would be on the table and he’d listen to any ideas that were presented to him, but if they included tax increases there would also have to be “tax fairness.” Most people took that to mean there would have to be offsetting tax cuts. Prieto said he’s prepared to agree to a compromise. “I’ve made the difficult call for a gas tax increase to fund transportation because it’s the right thing to do for our state,” Prieto said. “No one wants to pay more at the pump, but the alternative is much more costly and I support coupling it with ideas such as phasing out New Jersey’s estate tax to match the national level, and finding ways to exempt retirement income from the income tax. I’ve been ready to compromise. Let’s get it done.”
Democrats swore in their largest majority in the state Assembly in 37 years Tuesday, but the lower house’s leaders urged its members to work in unity and avoid the kind of bickering that has plagued politics across the country in recent years. They also agreed New Jersey’s sky high property taxes should be their focus.
Jon Bramnick, asked his colleagues to “make a promise” to draft meaningful, bipartisan policy in the new legislative session. Both Prieto and Bramnick said lawmakers’ focus should be relieving New Jersey’s property taxes, among the highest in the nation.
In addition, Prieto once again touted his concept of the state gas tax to help fund the nearly broke state Transportation Trust Fund, which pays for transportation projects across New Jersey. And he said he is open to the Republican idea of cutting New Jersey’s estate tax in return. “Nobody wants to pay more at the pump,” Prieto said. “We want to make sure we are fair to everybody.” In a speech Tuesday, Sweeney — a likely Democratic candidate for governor next year — called for strong leadership and a strong agenda.
“What we want to avoid is what we see in Washington. Too much partisanship. Too much posturing. Too few results,” he said. “Leadership is what gets things done in this house.” Sweeney praised both Republican and Democratic lawmakers for their work on reforming juvenile justice, preserving open space and improving transparency in Superstorm Sandy recovery. Looking ahead, he said the Senate needs an “aggressive blueprint that tackles our state’s biggest challenges.” The planks mentioned in his remarks Tuesday mimic a platform he rolled out last year that focuses on early childhood education, college affordability, transportation, public-private partnerships, neighborhoods and retirement security.
“There are enormous things, great things this house can do when we work together, and we’ve proven that,” Sweeney said. “Whosever idea it is that makes sense that’s going to improve the quality of life for the people in this state, I’m supporting it. I don’t care if it’s a Republican or a Democrat.” Like Sweeney, Kean urged the body to work together to cut taxes and grow the economy. “Let’s strive to serve not just as responsive and responsible legislators, but be remembered as responsible caretakers of this chamber, the Legislature, but most importantly, the state of New Jersey.”