N.J. Senate President Pushes Atlantic City Takeover Bill

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New Jersey Senate President Steve Sweeney, D-Gloucester, said Wednesday that Atlantic City's failure to confront its financial mismanagement means state intervention is the only solution to solve the city's fiscal crisis.

Sweeney criticized Atlantic City Mayor Donald Guardian during a press conference for withdrawing a layoff plan last year and failing to implement any shared services. The Democratic lawmaker urged Assembly passage of a new intervention bill he introduced that would allow the state to alter municipal debt and union contracts as well as sell city assets after 130 days if a "financial stability" reform plan is not implemented. His remarks came a day before the State Assembly is scheduled to vote on rival legislation proposed by Assembly Speaker Vincent Prieto, D- Secaucus, which would allow for a five-member planning committee to step in only after the city fails to meet annual benchmarks.

"The mayor recognized the severity of the crisis in city government but he has failed to make the major changes that are needed," said Sweeney. "I had high hopes for Mayor Guardian at the beginning, but the lack of leadership only allowed the problems to grow worse and to spread. Now the city is out of money and we are out of time."

Sweeney's press conference occurred just hours before Standard & Poor's lowered its Atlantic City credit rating deeper into junk territory to CC from CCC-minus, saying that "a default or debt restructuring appears to be a virtual certainty even under the most optimistic circumstances." S&P said the city's ability to meet its financial commitments in the long-term is "unsustainable."

Guardian said in response to Sweeney's criticisms that the city has 330 less employees since when he took office in January 2014 with additional efforts to reduce costs and streamline services. He emphasized that legacy costs and expensive casino tax appeals are biggest sources of Atlantic City's struggles and not the number of government workers.

"As any expert will tell you, we simply cannot cut our way out of this problem," said Guardian in a statement. "We want a solution as much as anyone else, but we need a comprehensive solution to a problem that has been 30 years in the making."

Atlantic City, which suffered four casino closures in 2014, is running low on cash, though it made a $1.8 million debt service payment Monday.

The Jersey Shore gambling hub implemented a 28-day pay period on April 8 to avert a government shutdown since the city needed May tax revenue to pay workers. Sweeney said his state intervention bill would have support of Gov. Chris Christie and enable companion legislation allowing Atlantic City's eight remaining casinos to make payments in lieu of taxes for 10 years, including $30 million collectively in 2016 to go into effect.

"If the reform legislation is put in place the city's fiscal problems will shrink," said Senator Sweeney. "They can restructure and refinance their debt, have reliable tax revenue, capitalize on existing resources that are now dormant, and find savings in shared services and early retirement."

Speaker Prieto said in response to Sweeney's remarks that he will not bring up his Senate bill up for a vote tomorrow. Guardian reemphasized his support for Prieto's bill Wednesday.

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