After five months of waiting, New Jersey Governor Chris Christie has conditionally vetoed the Atlantic Rescue Plan—a package of bills designed to stabilize the resort’s casino taxes.
In New Jersey, a conditional veto sends the bills back to the state legislature with provisions and changes proposed by Christie. If the legislature accepts the changes, the bills can be passed.
The main bill in the package would allow the city’s eight casinos to make payments in lieu of taxes totaling $150 million for the next two years and $120 million yearly for the next 13 years. The bill is designed to end costly tax appeals from the casinos that have cost the city tens of millions in revenue over the last few years.
Christie’s condition would withhold $30 million of that money a year for 2015 and 2016 from the city respectively until the resort adopts a fiscal recovery plan approved by the state.
“I am concerned that the bills, in their present form, fail to recognize the true path to economic revitalization and fiscal stability in the city,” said Christie in his veto message. “While these bills represent the bipartisan efforts of many to provide important, near-term support to the city’s immediate challenges, I do not believe they meet the goal of setting a course toward renewed, long-term prosperity and economic growth. To achieve these goals, we must continue our work and go further to ensure that the next step leads to that economically vibrant future for Atlantic City.”
Christie’s veto also recommends elimination of a PILOT (payment in lieu of taxes) committee made up of casino officials that would decide how much each of the city’s casinos owed in the program. The state Local Finance Board would takeover that responsibility under his proposal.
The veto received criticism when first announced, especially as the bills were passed by the legislature in June and Christie waited until an absolute deadline to act.
“It’s incredibly unfortunate the governor chose to let these bills sit on his desk for months while he panders to voters across the country,” the bills’ sponsor, Democratic Assemblyman Vince Mazzeo said in a statement, referring to Christie’s presidential bid.
But within hours Christie issued a joint statement with Senate President Steve Sweeney, a Democrat and a principle proponent of the bills, promising “to immediately sit down together, with consultation of interested parties, to construct a final and fast resolution path for Atlantic City.”
The legislature has until January 12 to act on the bills.
Christie appointed a fiscal manager for the city in January, but no comprehensive fiscal plan for the city has been announced.
One bill in the package mandated employee benefits for casino workers. That bill was vetoed.
Other bills conditionally vetoed would have diverted redevelopment taxes the casinos now pay to help reduce Atlantic City’s debt, and elimination of the city’s casino-funded marketing arm, with that agency’s $30 million annual marketing budget also going to the city.
The city’s current 2015 budget also depends on about $33 million in casino revenue from those bills and it was unclear how the vetoes will impact the budget. Christie’s conditions, however, do not substantially change those bills,
Christie did sign one bill that approves additional school aid for the city.
The Casino Association of New Jersey said the bills were “vital” to Atlantic City’s future, according to the Associated Press.
“Every day that passes jeopardizes the financial stability this legislation would achieve, and also threatens not only our employees but also non-casino Atlantic City businesses as well as residents and taxpayers across the county,” the association said in a statement.
The conditional veto did not address a problem Atlantic County has had with determining how much of the casino money would go to pay county taxes. The county and city had agreed to a 13.5 percent share for the county, but that was not spelled out in the bill.
“I don’t want to gum things up and act like I didn’t get what I wanted. The conditional veto he put on it is a pretty strong message this is a work in progress,” Atlantic County Executive Dennis Levinson told the Press of Atlantic City. “We all have to sit down and cooperate. The goal is the same for everyone—a vibrant, redeveloped Atlantic City.”
The veto also led to calls from several Atlantic County mayors for the city to declare bankruptcy rather than pass an undue tax burden onto other county municipalities, the Press reported.
The conditional veto also perplexed Atlantic City Mayor Donald Guardian, who told the Press he felt the city was working well with the state to solve the city’s problems.
Guardian, however, says he has little problem with Christie’s conditions.
“Honestly, the restrictions on the city in terms of finances and budgets are already in place,” Guardian told Philly.com. “The state already has those in place. This gives them a little bit of a carrot. This is a cooperative program with the city and the state. They’re providing a lot of support for Atlantic City to help us get through this.”
City officials also speculated that the Governor wants the city to sell or dissolve Atlantic City’s independent municipal utilities authority, regionalize its police force and privatize trash collection—all ideas that have been floated to reduce the city’s expenses.
“This is kind of in step with the way the governor operates,” Guardian said. “He wants to be assured that we’re not just going to take a vacation because we received this money. It creates assurances. Certainly with an emergency manager and monitor all here on a daily basis, there’s nothing we’re hiding.”
