A showdown between Governor Chris Christie and New Jersey Assembly leader Vincent Prieto over competing plans to aid financially troubled Atlantic City broke last week with Christie and Senate President Steve Sweeney emerging victorious.
Atlantic City is facing a possible bankruptcy and could be out of cash by next month. The city has more than $500 million in debt it can’t pay back and faces an about $60 million hole in its budget.
Two plans have emerged to help the city. One plan, passed in the state Senate—proposed by Sweeney and backed by Christie –would have the state takeover all of the city’s finances after giving the city 130 days to fix its financial problems. The plan would allow the state to rip up union contracts.
Prieto wants to protect the city’s unions and offered his own plan that would protect collective bargaining rights. The plan would set benchmarks for the city to meet fiscally over two years or the state would move to take over its finances.
Both plans would set a payment in lieu of taxes plan for city casinos—designed to stop costly casino tax appeals—and steer other casino funds to the city’s budget.
Prieto had hoped to have his plan voted on in the Assembly earlier last week, but again no vote was taken when he couldn’t line up sufficient support for the measure. He has refused to post the Senate plan for a vote.
That set off another round of what has become entirely predictable rhetoric between Christie and Prieto. Matters were made worse when Prieto told reporters that he didn’t feel he had to rush his bill to the floor because “bankruptcy is an option.”
“We do not need the publicity that would go along with a bankruptcy,” Christie said at an unrelated news conference in West Trenton. “We do not need the domino effect it could have on the credit worthiness of other cities across the state. This is not a political game. And it is irresponsible—completely irresponsible—for any member in a responsible position in this state to be an obstructionist on this.”
Prieto, who said his bankruptcy comment was taken out of context, blamed the governor.
“The governor’s rhetoric is boring, tired and unproductive and his refusal to act or compromise is putting Atlantic City at risk,” the speaker said. “The governor can preen all he wants but while he does so, the Assembly continues working toward a compromise. This is very simple. Anyone who wants legislation to help Atlantic City better get the Assembly on board.”
Towards that end, Assemblyman Vincent Mazzeo told Philly.com that the Assembly is working on a compromise.
Mazzeo said the state’s Democratic caucus met early in the week and discussed a bill that would give the city at least 150 days to “get its house in order” under the auspices of a five-member panel comprised of state and local officials.
The plan combines two aspects of the competing plans, giving the city a shorter time to make its own financial moves, but also instituting the oversight panel, which is part of Prieto’s bill, the website—website for the Philadelphia Inquirer and the Philadelphia Daily News—reported.
Mazzeo said the compromise would include some form of immediate aid to the city in the form of a loan or possibly the redirection of the casino funds promised in earlier bills. The payment in lieu of taxes plan would likely be addressed in a later bill, he said.
Prieto’s defeat came at the hands of George Norcross, the political power broker in the southern part of the state and an ally with Christie. Norcross will back Sweeney as Christie’s successor in the 2017 election, while Prieto is aligned with Jersey City Mayor Steve Fulop, who is also seen as a loser in this showdown.
