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Speaker Prieto’s Atlantic City Economic Recovery Bill Continues Advancing, Now Poised for Floor Vote

Bill Would Provide Casino Payments in Lieu of Taxes & Create Special Planning Committee with Significant Powers to Set Key Fiscal Benchmarks to Reform City Spending & Operations

An Assembly panel on Thursday, once again, granted unanimous, bipartisan approval to sweeping new economic recovery legislation sponsored by Speaker Vincent Prieto that would provide Atlantic City with stable annual payments in lieu of property taxes from casinos and create a special new planning committee with significant powers to reform city spending and operations.

The bill (A-3614) was initially heard by the Assembly Judiciary Committee on April 7, and the committee released it with unanimous, bipartisan approval. The Judiciary Committee approved several amendments to the bill today, chief among them being a provision specifying that payments in lieu of property taxes from casinos will also go to city schools, as initially intended. The bill is now poised for an Assembly floor vote, which is expected to be scheduled as soon as member availability is confirmed.

“I made clear that this bill was a work in progress, and I remain open to compromising, but we are prepared to move forward,” said Assembly Speaker Vincent Prieto (D-Hudson/Bergen). “With this bill and the remedial actions it can bring, along with the governor’s existing tools, we can put Atlantic City on the right track for fiscal success and help it transition to the resort destination we all know it can become in the coming years. It is the right compromise for everyone, especially the people of Atlantic City.”

Under the bill:
· The casino gaming properties in Atlantic City would, no more than 30 days after the bill’s effective date, provide $120 million total to the city for tax year 2016 in payments in lieu of property taxes. Such payments would continue for 10 years. The figure can change annually based on gross casino revenues and inflation. Of this money, 13.5 percent would be remitted to Atlantic County and, under the amendments, the Atlantic City school district will receive the same percentage of the PILOT payments that it currently receives from the property tax levy, which was 36.21 percent in 2015.
· The bill also requires the casinos to make additional payments to the state for 2015 through 2023, starting at $30 million for 2015. This money would be remitted by the state to Atlantic City upon approval of a financial plan submitted by the city to the Local Finance Board.
· A 5-member Atlantic City Planning Committee would be created to, within 90 days, develop and adopt a five-year financial plan for the city. The plan would include specific annual fiscal benchmarks the city must reach each year.
· The committee would include the state Department of Community Affairs commissioner, the state Local Government Services director, the state treasurer, the Atlantic City mayor and the Atlantic City council president.
· Upon creation, the committee would be able to control litigation and the city’s legal affairs, retain professional services for the city, retain bond counsel and adopt bond ordinances, negotiate and execute documents on behalf of the city and procure goods and services.

“This is a compromise bill that everyone can get behind,” said Prieto. “The testimony we heard during Monday’s budget committee made clear that the state cannot be trusted to reform Atlantic City, given its ineffective oversight since 2010. We need a new approach that will bring real reform and savings while protecting the civil liberties of residents and the rights of workers. This bill is that approach.”

After a year, the committee would issue a report on whether it has reached its benchmarks to a special master appointed by the state Supreme Court chief justice. If the special master determines benchmarks have not been met, the committee could then:
· Dissolve municipal departments and other operations, except for those directly related to public safety and emergency services.
· Veto the minutes of Atlantic City’s governing bodies.
· Sell, lease or dispose of municipally owned assets, such as the water, sewer and wastewater facilities.

“Collective bargaining and worker rights cannot be the first thing on the chopping block,” added Prieto. “The expert committee created under this bill would be given a year to use its sweeping power to cut spending, save money and restore Atlantic City to sound financial condition. If it does not meet specific benchmarks, more draconian steps could rightly be taken, but worker rights must first be valued.”

If the benchmarks are again not met, the committee could then:
· Amend or terminate any existing contracts or agreements.
· Unilaterally modify, amend or terminate any collective bargaining agreements, except for those related to school districts.
· Act as the sole collective bargaining agent for the city.
· Unilaterally modify wages, hours or other terms of employment for any expired collective bargained agreements.
· Abolish any non-elected municipal positions in the city at any time.
· Enter into an agreement with Atlantic County or other municipalities in Atlantic County to share or consolidate municipal services.
· Exercise other various authorities under state law.

“Nothing in this bill prevents the governor from also using his existing authority to help Atlantic City, including using transitional aid agreements to compel financial actions,” Prieto said. “This bill is a very fair compromise that accomplishes everyone’s goals. It protects core values such as collective bargaining, fair labor practices, civil liberties and the importance of local self-governance to democracy. It also gives the city immediate and sustainable financial support to allow it to continue providing vital services while finding ways to responsibly cut spending and save money.”

Specifically, the amendments approved today made the following changes:
· Provide that the Atlantic City school district will receive the same percentage of the PILOT payments that it currently receives from the property tax levy (36.21% in 2015);
· Require the Atlantic City Planning Committee to issue interim, in additional to annual, reports;
· Require the Special Master to be appointed by the Chief Justice within 30 days of the bill’s effective date; and
· Clarify that the committee’s authority expands if Atlantic City misses benchmarks after any 12-month period established in the five-year plan and expands again if the city misses bench marks for any additional 12-month period, whether consecutive or nonconsecutive.

The bill also repeals the law requiring the Casino Reinvestment Development Authority to enter into an agreement with the Atlantic City Alliance.

The amended legislation was approved by the Assembly Judiciary Committee.