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Costly ad war brews over 2016 N.J. ballot measures

As New Jersey lawmakers push ballot initiatives such as casino expansion and pension funding for public employees, interest groups are preparing to spend tens of millions of dollars to fight for or against the proposed constitutional amendments next year.

As New Jersey lawmakers push ballot initiatives such as casino expansion and pension funding for public employees, interest groups are preparing to spend tens of millions of dollars to fight for or against the proposed constitutional amendments next year.

Democrats, who control both houses of the Legislature, are advancing legislation that would ask voters to amend the constitution to require the state to contribute more money toward the pension system.

But they are divided over how to proceed with casino expansion, in part because of gubernatorial politics.

Even so, lawmakers and political observers say, Democrats in the Senate and Assembly may well compromise on the terms of an amendment that would pave the way for two casinos to open in North Jersey.

While New Jersey is expected to be reliably in the Democratic column, Pennsylvania is considered a possible battleground state in next year's presidential election. That contest, along with other competitive congressional and state races there and a gubernatorial election in Delaware, is expected to drive up advertising rates in the expensive Philadelphia media market that serves South Jersey.

New Jersey politicos and media-buying executives are anticipating an ad war over casino expansion with operators in New York and Pennsylvania, who are likely to see more gaming in the region as a threat to their business.

New York is solidly Democratic, so that market is unlikely to attract much presidential advertising. However, it's still the most expensive media market in the country.

Larry Weitzner, chief executive of the GOP media-buying firm Jamestown Associates, estimated it would cost $1.6 million for a 30-second spot on broadcast television to be shown over seven to 10 days in 2016.

Cable advertising may cost as much as $500,000 a week, he said. Add in radio, mail, polling, and grassroots campaigning, "and you are looking at tens of millions of dollars potentially being spent in 2016," Weitzner said.

All that spending in a year when no state-level races - for governor, Assembly, or Senate - are to be on the ballot.

One person close to the casino negotiations estimated, conservatively, that at least $40 million in total will be spent by groups supporting and opposing expansion.

That would shatter the previous record for spending on a ballot initiative - set in 1976, when groups for and against authorizing casinos in Atlantic City spent today's inflation-adjusted equivalent of $5.6 million, according to the state Election Law Enforcement Commission.

The referendum question passed.

In 2012, groups spent about $90 million supporting and opposing gaming expansion in Maryland, according to data compiled by the National Institute on Money in State Politics.

The top supporting donor was MGM Resorts International, which spent nearly $41 million. MGM operates Borgata Hotel Casino & Spa in Atlantic City and, under legislation being debated in New Jersey, would be eligible for a license to operate in North Jersey.

Another fight could erupt over pension funding.

If that measure were to get on the ballot, the New Jersey Education Association and other public-sector unions would likely spend millions to try to ensure its approval.

"We have 200,000 members, and we believe our members will be passionately committed to doing anything it takes to pass the amendment," said Steve Baker, spokesman for the NJEA, which is the state's largest teachers' union.

Republicans oppose the idea, and Gov. Christie has called on business leaders to "get a spine" and spend money to stop the amendment.

"We're looking at $50 [million] to $60 million, maybe even more," said Jeff Brindle, executive director of the Election Law Enforcement Commission.

The effort to put a casino question on the ballot faces political hurdles.

Like any proposed amendment, the measure first must pass with a majority vote of each house of the Legislature both this legislative session, which ends in mid-January, and next, or once with a three-fifths majority.

Senate President Stephen Sweeney (D., Gloucester) on Friday introduced legislation that would ask voters to allow two casinos to open in North Jersey, in separate counties.

On Monday, Assembly Speaker Vincent Prieto (D., Hudson) introduced his own version. They differ on two issues: Sweeney wants to redirect to Atlantic City a greater portion of the taxes on the new casinos' revenue, and would limit the pool of new operators to those that already have a presence in the Shore city.

Prieto wants one of the new licenses to be available to an outside operator, such as Hard Rock, which has said it would like to partner with New York real estate developer Jeffrey Gural for a casino in the Meadowlands.

In an interview Wednesday, Gural said he would not support or put money behind a ballot question that limited the pool of potential bidders to existing operators in Atlantic City.

"I just think that's something that would be difficult to get passed," he said. However, Gural said he would be open to partnering with an Atlantic City operator if such an amendment passed.

Paul Fireman, an entrepreneur who wants to build a multibillion-dollar casino hotel and resort in Jersey City, does not want to be forced to partner with current operators in Atlantic City, sources said.

One source said Fireman could find an outside partner and grant an Atlantic City operator a stake of 10 percent under Sweeney's legislation. Part of the goal is to limit a marketing war between Atlantic City casinos and new ones in the north, the source said. A message left with Fireman's office wasn't returned Wednesday.Underlying the disagreement between Prieto and Sweeney is gubernatorial politics. Sweeney, who wants to succeed Christie in 2017, has said he would only support gaming expansion if it would help revitalize Atlantic City with new revenue to support nongaming development.

But Sweeney also wants to win favor with North Jersey Democratic power brokers and the politically influential building trades, which stand to gain jobs from casino construction.

In addition to Prieto's responsibilities as speaker, he is chairman of the Hudson County Democratic Organization and an ally of Jersey City Mayor Steve Fulop, who will likely challenge Sweeney for the party's gubernatorial nomination in 2017.

Support for Sweeney's proposal waned after Fulop voiced his displeasure with it on a conference call last week with North Jersey leaders, according to sources.

Even if Democrats unite behind a bill, they may face an uphill battle in convincing the public: 57 percent of New Jersey residents oppose casino expansion, while 37 percent support it, according to a June Fairleigh Dickinson PublicMind poll.

856-779-3846 @AndrewSeidman