Assembly committee backs alternate A.C. plan

TRENTON - The momentum building in the Statehouse to take over Atlantic City's government slowed Thursday, as Assembly Speaker Vincent Prieto proposed his own plan to rescue the financially struggling resort town and defied calls from Gov. Christie and South Jersey Democrats to adopt a more aggressive approach.

Prieto's plan, which advanced Thursday on a 7-0 vote of the Assembly Judiciary Committee, would forestall key elements of Christie's proposed state intervention from taking effect unless the city fails to meet annual fiscal benchmarks.

Christie described Prieto's bill as a "completely ineffective solution" and said he would veto it. Prieto (D., Hudson) said he was undeterred.

"We cannot let the governor be the one dictating this," the speaker told reporters after an Assembly voting session late Thursday. "We are the Legislature. . . . We should be putting a bill on his desk for him to sign."

Earlier Thursday, Majority Leader Louis D. Greenwald (D., Camden) had pressed Prieto to hold a vote on a proposed takeover. Greenwald later said they had made progress during a Democratic caucus meeting.

"The endgame for us is that Atlantic City does not default and go into bankruptcy," Greenwald told reporters, adding that Prieto had assured him that was not the speaker's intention.

All parties acknowledge that the city faces a financial crisis: Wall Street credit agencies say it could soon run out of cash and default on its debt payments this year.

The city owes $250 million to bondholders and $150 million in property-tax refunds to the Borgata casino.

Prieto wants to create a planning committee consisting of state and local officials to develop a five-year financial plan for the city. If the city didn't meet the committee's benchmarks within a year, the committee would gain authority to dissolve city departments, sell municipal assets, and veto the minutes of the local government.

In another year, if the city still didn't show sufficient progress in cutting costs, the committee would be able to amend or terminate labor contracts, eliminate municipal positions, and share services with Atlantic County.

The bill Christie supports - which passed the Senate last month, 27-9, and is sponsored in the Assembly by Greenwald - would immediately give those powers to the state. Prieto says that would needlessly violate the "core" Democratic principle of protecting workers' rights.

Prieto's proposed planning committee would include three members of the executive branch, as well as Atlantic City's mayor and council president. A "special master" appointed by the chief justice of the state Supreme Court would determine whether the city had met the goals set by the planning committee.

Prieto, testifying before the Assembly panel Thursday, said his bill would not give Atlantic City "carte blanche" to do what it wants.

"They're getting an ability to come out of the woods," he said.

Despite the vote in favor of Prieto's bill, Greenwald on Thursday wrote the speaker a letter pleading with him to hold a vote on Greenwald's bill, also sponsored by Senate President Stephen Sweeney (D., Gloucester).

"Stunningly, your bill has a provision to allow for the termination of collective bargaining," Greenwald wrote. "The presence of this concept in my bill is supposed to have been the cause of much of the inability for all parties to come to a resolution on this issue."

Greenwald suggested Prieto had put "politics and theatrics before people and principle."

Christie, speaking at a news conference at Catholic Charities in Trenton, said Prieto's bill was "not something I would even begin to think about supporting" and predicted that it was unlikely to pass the Assembly.

Of the provision that would enable the state to break collective-bargaining agreements in year three, if benchmarks hadn't been met, Christie said: "Why do you think he gave the governor that authority three years from now? Because I will be gone, in 20 months. And he's counting on the fact that he'll have a Democrat who is beholden to the public-sector unions who would never dare to use that authority."

The speaker said he wanted to give lawmakers in both houses time to review his legislation, adding that he was open to amendments.

Prieto's bill is supported by public-sector labor leaders, which offered their support before the Judiciary Committee on Thursday. Charles Wowkanech, president of the state AFL-CIO, said the takeover legislation was a "disgrace" to workers.

"Organized labor not only built the city but runs the city," he told the Assembly panel.

Mayor Don Guardian said the difference between Prieto's legislation and the takeover advocated by Christie and others was the "difference between a democracy and a dictatorship."

"We are not an autocratic society," added Assemblyman Gordon Johnson (D., Bergen). John Currie, the state Democratic Party chairman, and the American Civil Liberties Union also suggested they favored Prieto's approach.

Prieto's bill would establish a payment-in-lieu-of-taxes system for the city's eight casinos. In an effort to halt property-tax appeals, the casinos would be required to pay the city a collective sum of about $120 million annually for a decade.

The Senate has passed similar legislation, though there are a couple of key differences. For example, the Senate version would allow casinos to opt out of the PILOT program if new casinos are built in North Jersey. Prieto's bill does not contain that provision.

In November, voters will decide whether to adopt a constitutional amendment that would authorize construction of new casinos.

aseidman@phillynews.com

856-779-3846 @AndrewSeidman

Staff writer Maddie Hanna contributed to this article.