In AC Takeover Negotiations, Prieto Bill Down for the Count

The grappling over a state takeover of Atlantic City has come to an end, sources say

The grappling over a state takeover of Atlantic City has come to an end, sources say

The battle between Democratic lawmakers over a state takeover of Atlantic City has come to a close with Senate President Steve Sweeney (D-3) having the upper hand over Assembly Speaker Vince Prieto (D-32), Assembly sources said Friday. An official announcement is expected by the end of the day. The bill posted in the Assembly will hew to the Sweeney bill favored by Governor Chris Christie and influential South Jersey Democratic boss George Norcross III.

The compromise reached this week will offer the city just 150 days to plan cuts to its $260 million budget before handing that responsibility over to the state Local Finance Board. After casino closures decimated its ratable base by 70 percent, the casino enclave has teetered on the edge of default with more than $550 million in debt. Bankruptcy would still be a possibility even under a state takeover.

Aside from that five-month grace period, sources confirmed that the Assembly compromise will hew closely enough to the Sweeney-sponsored bill to appease Christie, who has said he would veto Prieto’s plan. Under the compromise public union contracts would still be up for cuts and alterations, the long-delayed payment in lieu of taxes agreement with the city’s remaining casinos will still accompany the legislation as its own bill, and city assets would still be handed over to the state if the city fails to balance its budget.

If city officials can meet the tall order of plotting a complete elimination of its $33.5 million deficit within those 150 days and gain state approval for its plan, collective bargaining agreements may be taken off the table for 2017 as the city starts implementing those cuts.

Prieto had sought to pass his own takeover plan in the lower house, one that would offer the city two more years of fiscal benchmarks before installing a five-person committee to oversee the ailing gaming capital’s finances. After last week’s Assembly session, when Prieto declined to post the bill once a string of absences left him short of the 41 votes needed to pass his own plan, the Speaker went back to the bargaining table but lacked the leverage to get those provisions through.

Prieto allies were still hopeful late into the day Friday that additional concessions would make it into the final language of the bill. If the Speaker’s camp is successful in getting those concessions through, the Senate amendment allowing casinos to opt out of the PILOT if new casinos open in North Jersey would disappear. The takeover would also apply only to Atlantic City, not to any New Jersey municipality that loses a similar share of its property tax base.

Mayor Don Guardian said on his monthly radio show Thursday that he is satisfied with the compromise.

“I think the plan that is being unveiled is certainly something that Atlantic City can live with,” Guardian said. “It’s good.”