Assembly panel goes against Christie, OKs Atlantic City plan

A new proposal to help Atlantic City avoid going broke advanced in the state Legislature on Thursday, but Gov. Chris Christie declared it dead on arrival, setting up the possibility the state will take no action on behalf of the struggling gambling resort.

A state Assembly committee approved a measure by Speaker Vincent Prieto that seeks to recast assistance to struggling Atlantic City on his own terms.

But Christie said he won't consider the alternative measure, which will be posted for a vote in the full Assembly next week.

The City Council passed a payroll maneuver Wednesday night that will prevent it from running out of cash and shutting down nonessential government services for about two months; without that vote, it would have run out of money on Friday. But a long-term solution looked more uncertain than ever on Thursday.

Prieto's bill combines elements of a two-bill package that he has refused to put up for a vote in the Assembly. It lets casinos make payments to the city in lieu of property taxes and would give the state authority over the city's finances, but only if the city fails to meet certain performance targets.

Prieto objects to provisions in the previous takeover bill that would allow the state to cancel union contracts.

"I think this is a great compromise," Prieto said. Canceling union contracts "is on the table, but not first on the chopping block."

Prieto said he has not yet spoken with Senate President Steve Sweeney, a fellow Democrat, about the bill, but called on him and Christie to consider it. A spokesman for Sweeney did not immediately return a call seeking comment Thursday.

Christie called Prieto's measure a "union protection plan" and said "this is the most irresponsible game of political chicken I've ever seen."

Atlantic City Mayor Don Guardian said the difference between Prieto's new bill and one written by state Senate President Steve Sweeney "is the difference between a democracy and a dictatorship."

Prieto's bill would establish a five-member Atlantic City Planning Committee consisting of state and local officials, including three Christie appointments and Atlantic City's mayor and City Council president. After a year, the committee would report on whether the city has met certain performance benchmarks to a special master appointed by the chief justice of the state Supreme Court.

If the special master agrees the benchmarks have not been met, the state could then do most of the things envisioned in the Senate version of a takeover bill.

The bill divides the sanctions into two periods. If benchmarks are not met after the first year, the state would be able to dissolve city authorities and agencies; veto the minutes of City Council and other city board meetings; and sell off city assets including its coveted water utility. If the benchmarks are not met for a second consecutive year, the state could cancel or unilaterally modify union contracts; abolish any non-elected positions in Atlantic City government; and enter into shared services agreements with Atlantic County or other government agencies, among other powers.

Prieto said important differences between his bill and Sweeney's include the fact that under his own measure, the state would not be exempt from unfair labor practice laws; casinos would not be able to opt out of the payment-in-lieu-of-taxes requirement; and that Atlantic City residents would still be able to initiate binding referendums instead of simply an advisory vote with no legal authority.

The measures are designed to help Atlantic City deal with crushing financial problems brought on by the contraction of its casino industry, which has lost more than half its revenue - and four of its 12 casinos - since 2006.

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Associated Press reporter Michael Catalini contributed to this story.