Pivotal A.C. vote expected Thursday

TRENTON - After months of sniping among some of New Jersey's most powerful politicians, Thursday may finally bring some clarity to the debate over how to save Atlantic City from financial disaster.

Assembly Speaker Vincent Prieto (D., Hudson) said the lower house will vote on a bill he says would provide needed financial assistance to the cash-strapped seaside resort while also demanding accountability from the city government. Opponents say it would not give the state the authority it needs to intervene successfully.

How the vote unfolds may help define the battle lines of the 2017 Democratic gubernatorial primary, especially after one likely contender, Jersey City Mayor Steve Fulop, took the extraordinary step Tuesday of attacking the state's most powerful Democratic political operative, George E. Norcross III.

Norcross, an insurance and hospital executive, is the chief political benefactor of Senate President Stephen Sweeney (D., Gloucester), who is expected to run against Fulop in the primary, among other possible contenders.

Backed by Gov. Christie, Sweeney has pushed his own Atlantic City legislation through the upper house of the Legislature. Christie has vowed to veto Prieto's bill if it reaches his desk, and Sweeney said Wednesday that he would not hold a vote on Prieto's proposal in the Senate even if it passes the Assembly.

Should Prieto's legislation not pass the Assembly on Thursday, Prieto would be weakened as speaker and might be forced to hold a vote on Sweeney's bill.

But a victory by the speaker would challenge the strength of the six-year Christie-Sweeney alliance.

"He should put his bill up for a vote," Sweeney said at a Statehouse news conference. "He really should. And once it doesn't pass, then he should pass my bill. Otherwise, Atlantic City is going bankrupt. In fact, we're close to it now."

Prieto has assumed a similar posture, refusing to hold a vote on Sweeney's legislation.

"The Senate president need not worry about the Assembly's business, but, as he wishes, the bipartisan Assembly compromise bill is going up tomorrow," Prieto said in a statement. "The Senate bill will not."

Sweeney's bill would authorize a state takeover of the city's government for five years. Prieto wants to give the city two years to meet certain fiscal benchmarks before granting the state such power, including the ability to modify or terminate labor contracts, a key sticking point.

Both lawmakers support a payment-in-lieu-of-taxes system for the eight casinos operating in the city, which they say would help stabilize the property-tax base. Christie previously vetoed PILOT legislation, saying the city's government must be reformed if it is to receive more state aid.

Atlantic City is running low on cash and was barely able to make an interest payment on its debt service this week. State and local officials say the city could run out of money in June. Analysts have warned that a default or bankruptcy could have a ripple effect on other financially distressed municipalities.

Standard & Poor's on Wednesday downgraded the rating on Atlantic City's general obligation bonds from CCC-minus to CC. "The downgrade reflects our opinion that a default or debt restructuring appears to be a virtual certainty even under the most optimistic circumstances," said S&P global credit analyst Timothy Little.

S&P's outlook for the city's debt is negative. The city of 40,000 people owes about $150 million in property tax refunds to the Borgata casino and $250 million to bondholders.

Mayor Don Guardian, who supports Prieto's bill, defended the city's efforts to rein in costs amid the contraction of the casino industry. "Even if I fired every single city employee, we would still be in tremendous debt because of legacy costs and casino tax appeals," he said in a statement. Guardian called for a "comprehensive solution to a problem that has been 30 years in the making."

The impasse in Trenton appears to be hurting business in the city.

Jeff Albrecht, chair of the nonprofit Meet AC and general manager of the Sheraton Atlantic City Convention Center Hotel, said Meet AC had reduced its forecast for convention hotel bookings from 300,000 to 180,000 because of the city's debt crisis and the "current legislative impasse."

"Sales leads are drying up, and those clients that are still on the books are selecting other cities to host their convention," Albrecht wrote this week to Christie, legislative leaders, and Guardian. "Economically speaking, we are losing tens of millions of dollars over the next one to five years."

"The ongoing political battles and economic news has all but erased the two years of positive momentum and publicity Meet AC has invested and worked so hard as an organization to achieve," Albrecht said.

Sweeney also responded to a statement released Tuesday by Fulop, who accused Norcross, "a nonelected official" and "nonregistered lobbyist," of meddling in the Atlantic City debate.

Fulop "should look in the mirror," Sweeney said. "He's the mayor of Jersey City. He's got all kinds of problems in his own city with tax [revaluations] and everything else."

Sweeney added: "When it comes time to run for governor or whatever he wants to do, then you run for governor."

aseidman@phillynews.com

856-779-3846 @AndrewSeidman