A compromise on Atlantic City could be in the works

New Jersey Democratic legislative leaders have yet to reach consensus on the Atlantic City intervention, and Gov. Chris Christie remains adamant that a full state takeover must occur. Yet the earliest signs of a possible compromise are starting to emerge.

A vote in the Assembly Judiciary Committee in Trenton yesterday added a key element to that chamber’s version of its Atlantic City intervention bill, and leaders in the Senate also gave up some ground earlier in the week, offering to amend their own legislation to delay for several months the proposed state takeover of city finances.

And though Christie has yet to budge from his stance that only a full and immediate state takeover can fix the cash-strapped resort’s fiscal problems, an eye-opening bipartisan deal that he struck earlier in the week with Senate President Stephen Sweeney (D-Gloucester) on the latest state Supreme Court nominee has given many hope that he’ll eventually be willing to reach a compromise with lawmakers on the Atlantic City issue as well.

What remains to be seen is how much more the Democratic leaders in the Assembly and Senate are willing to bend, and how badly Christie, a second-term Republican, wants to prevent Atlantic City from going into bankruptcy.

Atlantic City’s fiscal problems stem largely from the last recession and increasing competition from new casinos that have opened in neighboring states. In all, four of the resort’s 12 casinos have closed in recent years, costing the city thousands of jobs. The remaining casinos, meanwhile, have also successfully challenged their tax assessments, helping to reduce a ratable base that once totaled more than $20 billion to just over $7 billion.

Fate of union contracts

Right now, the key sticking point in Trenton on the Atlantic City issue remains the collective bargaining rights of the resort’s government workers. Christie wants an immediate state takeover of the city, which is now deep in debt and close to running out of cash. Only those powers would enable him to take the drastic actions that he says are needed to get the city back on solid footing, including ripping up current union deals.

The Prieto plan

Assembly Speaker Vincent Prieto (D-Hudson) is sponsoring legislation that would give the city up to two years to right its finances, giving city leaders more time to work out their own agreements with the workers. Prieto’s measure, which has the support of Atlantic City leaders, calls for the setting of financial goals or benchmarks that, if the city could meet them within 24 months, would stave off the takeover.

And Prieto yesterday offered up an amendment to his legislation that would ensure the city school district would get its fair share of revenues that would be generated from tax payments the resort’s casinos would make in place of their property taxes. That’s an element that’s already in the Senate’s takeover legislation.

Christie, meanwhile, has also been worried about funding for the school district, with his administration taking the city to court last week to ensure that tax payments collected by the city but owed to the school system will be paid.

“With this bill and the remedial actions it can bring, along with the governor’s existing tools, we can put Atlantic City on the right track for fiscal success and help it transition to the resort destination we all know it can become in the coming years,” Prieto said yesterday. “It is the right compromise for everyone, especially the people of Atlantic City.” 

The Sweeney plan

For his part, Sweeney is now offering to amend the Senate’s takeover bill to give the city more time to bring its spending in line with revenues. Sweeney said earlier this week that he’s willing to add changes that would give the city a period of 130 days to fix its finances before a takeover would take hold. He also pledged to secure the city a bridge loan from the Christie administration to get it through the summer.

With those amendments, the Senate bill would become the compromise position, with its period before a takeover could occur lasting far longer than what Christie wants it to be, but also much shorter than the timeframe that Prieto has laid out.

“For years the Atlantic City government has made bold assertions regarding its ability to solve the problem,” Sweeney said while offering up the amendment on Wednesday. “Despite those assertions, no solutions have ever been implemented in a material way. Our proposal gives the city one last chance.”

Gov Christie reaction

Christie was asked about this week’s new developments on the Atlantic City issue yesterday following a news conference on the improving state economy that was held at Union County College in Cranford. He said he still wants an immediate takeover, but also seemed to some to keep the door open to compromise.

“My position is what it’s always been. It hasn’t changed,” Christie said when asked about the Sweeney amendments.

But later, he added: “Eventually, if they have something they want to show me that represents a consensus, I’ll consider it at that time.”

And it was just a few weeks ago that Christie held a news conference in the State House to make a strong case for the next state Supreme Court justice to be a Republican. He said he was willing to use all the levers of power at his disposal to pressure Sweeney into holding a confirmation hearing for his preferred nominee.

But Sweeney, as he has for the past six years, held firm to his own position that only a Democrat should be appointed to fill the seven-member Supreme Court’s remaining vacancy. That, he said, would preserve the court’s longstanding tradition of partisan balance. Sweeney also promised to block a hearing on any nominee who wasn’t a Democrat until Christie reached the end of his second and final term in office in early 2017.

The impasse was resolved earlier this week during another State House news conference when Christie announced he will nominate Democrat Walter Timpone to fill the New Jersey Supreme Court vacancy. Though Timpone is an ally of Christie’s, if confirmed he would leave the court with three Republicans, three Democrats, and an independent justice, the makeup Sweeney wanted.

And Sweeney, also appearing at the event, said he would ensure Timpone soon gets a hearing before the Senate Judiciary Committee.

Christie, when asked earlier this week why he eventually backed down on the court issue, said his decision came down to deciding to get something done rather than keep waging a political battle.

“I wanted to get an agreement,” Christie said. “We needed to find that common ground.”

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NJ Spotlight, an independent online news service on issues critical to New Jersey, makes its in-depth reporting available to NewsWorks.