SJ lawmakers warn Speaker of AC 'catastrophe'
South Jersey lawmakers warned the state Assembly speaker Sunday that his refusal to consider a state takeover of Atlantic City would result in "a catastrophic knock-down blow to the people of Atlantic City, Atlantic County and the region."
South Jersey lawmakers warned the state Assembly speaker Sunday that his refusal to consider a state takeover of Atlantic City would result in "a catastrophic knock-down blow to the people of Atlantic City, Atlantic County and the region."
The letter from South Jersey's Democratic legislators, including Assembly Majority Leader Louis D. Greenwald (D., Camden), to Assembly Speaker Vincent Prieto (D., Hudson) was sent as Atlantic City is set to run out of money this week, possibly closing government for nonessential employees.
The letter pleaded with Prieto to post the takeover legislation for a vote when the Assembly convenes Thursday.
"Never before has a New Jersey city been on the verge of outright bankruptcy or financial collapse," reads the letter, a copy of which was obtained by The Inquirer.
The letter warned that "the repercussions of this crisis threaten the financial stability and well-being of every government entity in the state of New Jersey."
The Senate already passed the legislation with broad bipartisan support, and Gov. Christie has been hammering Prieto for weeks for opposing it. The letter means Prieto may have few options but post the legislation - or risk losing his speakership.
The bill would authorize the state to break Atlantic City's contracts with labor unions, dissolve agencies, sell assets, restructure the city's debt, and fire municipal employees, among other provisions.
Prieto says the bill would trample collective bargaining rights.
The debate over Atlantic City is driven in part by a political fight between Senate President Stephen Sweeney of Gloucester County and Jersey City Mayor Steve Fulop, both expected to seek the Democratic gubernatorial nomination in 2017.
Public-sector union support is seen as crucial in that race, and Sweeney already faces challenges on that front because of the pension and health benefit overhaul he shepherded through the Legislature in 2011.
Prieto is an ally of Fulop, who stands to gain politically from a Sweeney defeat.
"I welcome the input and it's safe to say everyone shares the concern about a bankruptcy, but the governor already has sufficient authority to save the city from financial disaster," Prieto said in a statement Saturday night. "I expect the governor to act and I expect to protect collective bargained rights."
The state has overseen Atlantic City's government since 2010 with a fiscal monitor, but the legislation would significantly expand the state's powers.
Atlantic City was devastated by the closing of four casinos in 2014. Its East Coast monopoly on gaming has eroded with casinos opening in neighboring Pennsylvania and New York.
The city passed a state-approved budget that anticipated millions of dollars in state aid that has not come. Christie vetoed legislation that would have provided the money, saying he will only sign it if the Legislature also passes the takeover bill.
The city owes nearly $250 million in debt to bondholders and $150 million in tax-appeal refunds to the Borgata casino-resort. A state-appointed emergency manager projected in January that the city faces a $300 million deficit over the next five years.
Mayor Don Guardian has said he will close City Hall for three weeks for nonessential employees starting Friday. However, unions are considering a plan to forestall a shutdown by accepting deferred pay.
Even so, Wall Street credit agencies have warned that the city could soon default on its debt payments. A default - or worse, bankruptcy - could have ramifications for other financially distressed cities in New Jersey, analysts say.
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