The New Jersey Assembly and Senate Agree on an Atlantic City Relief Plan

Last updated on November 2nd, 2018

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The New Jersey House Judiciary Committee and its counterpart in the State Senate approved a compromise plan that gives Atlantic City a 150-day reprieve from a state takeover of its finances. The proposals are contained in two separate bills, which stipulate a number of provisions which would help Atlantic City cope with its current predicament. In 2014, four Atlantic City casinos closed, costing the city (in jobs and casino property taxes) about 70% of its tax base.

The deal still needs approval in both houses of the New Jersey State Legislature, along with Gov. Chris Christie. Because Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto each signed off on the proposals, it is assumed each legislative body will approve the bill.

Chris Christie’s Stance

Gov. Christie’s approval is less certain. Chris Christie, the unpopular governor who failed to gain traction as the Republican Party’s nominee, preferred to have the state gain direct control of Atlantic City’s finances. That caused Mayor Don Guardian to accuse Christie of wanting to set up a “fascist dictatorship” in the Boardwalk city.

So far, the normally outspoken Christie has not given a statement on the new bill. There are reasons to believe he might sign the bill, because the final proposals are similar to a bill Christie and Stephen Sweeney backed earlier this year.

Vincent Prieto’s Support

The deal came after months of negotiation and vitriol. On one side, a bipartisan alliance of Christie, Sweeney, and South Jersey deal-maker George Norcross supported a plan for an immediate takeover. Under that plan, the state could sell off city assets and renegotiate union contracts, while subjecting the city to austerity measures which would cost city employees jobs.

On the other hand, Democratic Speaker Vincent Prieto supported a plan that would have given Atlantic City a full two years to get its finances in order. Prieto said he was trying to protect workers unions’ bargaining position, while floating the city enough cash to stay afloat.

Bob McDevitt’s Opinion

With two competing provisions, the public rhetoric became acidic. Ironically, Bob McDevitt, the head of the Local 54 union, claimed of Prieto: “He’s destroying the future of my city.”

Eventually, NJ.com suggested that the negotiations might cost Prieto his leadership of the State Assembly. Prieto is thought to have been in an alliance with Jersey City Mayor Steve Fulop, who is expected to challenge Sweeney for the Democratic nomination for New Jersey governor in 2017. Thus, the squabble between rival factions of the Democrats appeared to have a higher political meaning.

The Sweeney-Greenwald Plan

Last month, Stephen Sweeney changed his tack somewhat. He joined with Assembly Majority Leader Lou Greenwald (D-Camden) last month to propose a plan which would have given Atlantic City 130 days to draw up a plan for its financial future. It was a climb-down of sorts for Sweeney from the Christie Plan, but still a major limitation on Prieto’s 2-year vision.

The Sweeney/Greenwald plan provided a broad outline for Monday’s bargain. Several provisions gave Atlantic City room to maneuver and finances to make necessary changes. Mayor Don Guardian called Monday’s proposal “very fair”.

Details of the Plan

The plan protects union contracts, unless the city fails to draw up a plan within the 150-day limit. The plan also allows the city to offer early retirement packages to city employees, presumably to get them out of the system. This would avoid the need to fire longtime workers, while giving them something in return.

The deal also would do away with the opt-out clause for Atlantic City casinos under the PILOT plan. The PILOT bill allowed payments in lieu of taxes, which would avoid the need for costly legal battles on tax appeals each year. A later amendment allowed casinos to opt-out, if North Jersey casinos were built.

Vincent Prieto on “The Heat”

When asked on Monday if the heat he had taken in the negotiation had been worth it, Vincent Prieto said, “I haven’t taken any heat. You guys may write about a lot of heat, but I’m trying to do my job.“