With nothing but sharp rhetoric being offered from the state—but no imminent financial aid—Atlantic City has asked its union employees to defer being paid to once a month to avoid a municipal shutdown on April 8.
The move comes as Governor Chris Christie continues to push for a state takeover of the city—currently stalled in the state legislature—and said he will oppose the expansion of casinos in the state outside of Atlantic City unless the takeover bill is approved.
The city is asking its employees to change their pay schedule from once every two weeks to once every 28 days. That would skip a pay period in April and allow the city to pay employees after May 1, when quarterly tax payments to the city are due.
“It certainly gives us some additional time for all our elected officials including myself to be more of a diplomat and try to work out an arrangement we can all live with that helps the city move forward, but also doesn’t trample some of the rights,” Atlantic City Mayor Donald Guardian told the Press of Atlantic City.
The city’s four unions representing about 900 workers scheduled votes on the new payment plan late last week. City police and firefighters unions had already informally agreed to accept deferred paychecks and keep working in April.
The city also has to make a $1.7 million bond payment on May 1 and would have to make a monthly $8.5 million payment to the city’s school board in May.
“This is not the long-term solution,” Guardian told the paper. “We’re trying to find a solution, and rather than having to decide it by April 8, this certainly extends it into the June timetable or so. Eventually at the end of the second quarter we’ll have the same issues we had in the first quarter.”
The city has planned to shut down all non-essential government offices on April 8 until May 1. Though police, fire, sanitation and revenue producing offices would be open, most city workers would be furloughed.
That has led to concerns over which employees qualify as essential and that many furloughed employees would seek unemployment compensation at a cost to the city.
“The concern from the beginning is being fair to all city employees, yet being fair to taxpayers as well,” Guardian said. “This clearly is a more logical, more methodical process to go through.”
Christie’s Stance
Through it all, a war of words continues between Guardian and Governor Chris Christie as well as between Christie and state Assembly Speaker Vincent Prieto over a planned state takeover of the city.
Christie has been talking tough, saying on his weekly radio show that he will not allow the state to approve any request by Atlantic City to file for bankruptcy. The city would have to seek approval from the state to file.
While Christie acknowledged that Atlantic City defaulting on its debt would hurt bond ratings for all New Jersey municipalities, a bankruptcy filing would be even worse, he said.
He then later upped the ante at a news conference saying that if the takeover is not approved, he will actively campaign against a referendum to allow two new casinos to be built in the northern part of the state. The referendum is to go before voters in November. Although the referendum does not name sites for the new casinos, the Meadowlands and Jersey City are considered the frontrunners.
Christie, however, said voters would never approve new casino construction “when the only city where gambling is allowed is ready to go down the toilet.”
“Atlantic City is headed for a disaster and North Jersey gaming is headed for a defeat if we don’t get our act together,” Christie said. “It’s time to stop all the theater.”
Christie wants the state legislature to adopt a bill that would have the state completely takeover the city’s government for five years, including the right to sell the city’s assets and break union contracts. Prieto has refused to bring the bill to the Assembly floor unless union contracts are protected.
The takeover bill is tied to another bill that would set a payment in lieu of taxes plan for city casinos—designed to stop casino tax appeals—and redirect other casino monies to the resort. Though Christie twice vetoed the bill, he says he will now sign it if the takeover is included.
Neither bill made any movement in the Assembly last week.
Both Christie and Prieto have blamed the other for the impasse. Prieto received support early in the week from several state Assembly representatives who want the takeover bill re-worked to protect union contracts.
“The governor would have everyone believe that the only way to save Atlantic City from insolvency is to trample public workers, strip residents of their right to a representative government, and sell off city assets, perhaps irrevocably,” Assemblywoman Valerie Vainieri-Huttle said according to NJ.com. “I commend Speaker Prieto for taking a measured and thoughtful approach to the situation and standing up against tremendous pressure while the Governor refuses to negotiate in good faith with one half of the state legislature.”
Christie has blamed Prieto, saying he is courting union sympathy at the bequest of Jersey City Mayor Steve Fulop, who is considered a likely candidate for Governor in 2017. The takeover plan was proposed by state Senate President Stephen Sweeney, another likely candidate for Governor. Both are Democrats and Christie charged that Fulop is trying to hurt Sweeney on the issue.
Fulop has denied the charge and a spokesman for the mayor told the AP that Christie seems to have a “strange obsession” with Fulop and that the mayor hasn’t been involved in the state takeover effort. She said that the Republican governor is trying to “create a distraction from his failures.”
Christie, however, says the city’s union contracts are too lucrative and criticized high pension and benefits costs and salaries for high ranking employees. He said that the only way for the state to bring costs down is to break the current contracts.
Other Developments
The Press of Atlantic City reported that the delay on the PILOT bill is also becoming critical. The bill would redirect about $60 million in casino-funded marketing programs to the city split evenly between 2015 and 2016. The city is already dealing with a $30 million hole in its budget since the 2015 revenue did not materialize.
Now city casinos have told the governor’s office that if the PILOT bill is not in place by May, they will spend the $60 million on marketing under the state’s current laws.
The marketing is done by the Atlantic City Alliance, which has not spent the $60 million expecting the PILOT bill to pass, the Press said.
Guardian has also been left trying to defend the city which has made about $50 million in budget cuts in the last two years and eliminated 300 jobs.
Christie has said that the cuts weren’t enough considering that the city has about $400 million in debt that it currently can’t pay.
Christie charges that the city of about 39,000 spends more per resident than any city in the state at about $6,600 per resident. Christie said he is refusing to give the city more money because past city administrations have “spent like drunken sailors.”
Guardian, however, charges that the current $220 million budget includes money the city had to set aside for tax appeal payments—about $27.5 million—and that the city also serves workers and tourists that swell the daily population by several hundred thousand.
“Treat us like a city that has 300,000 people there and stuff like that, and the budget’s OK,” Guardian told NJ 101.5 radio.
Meanwhile, the city’s convention bureau—known as Meet AC—said it will launch marketing efforts to ensure that the public knows that the tourist and meeting industries in the city will be up and running this spring and won’t be affected by a municipal shutdown.
“The anticipated shutdown would be for only non-essential city government personnel,” the bureau said in a press statement. “Atlantic City’s casinos, resorts, hotels, restaurants, retail businesses, Boardwalk Hall and Atlantic City Convention Center will remain open and fully operational.”
Conventions and events scheduled in Atlantic City for April include the Atlantic Bakery Expo, the Health Professionals Network, the Atlantic City Beer and Music Festival, a Herbalife convention and the New Jersey Prevention Network’s annual addiction conference, all of which will be unaffected by a potential showdown.
The beer and music festival in particular has been a popular event drawing about 25,000 people and the bureau said conventions scheduled for spring and summer are expected to draw better than 100,000 attendees.
