Legislative leaders continue to disagree on A.C. rescue

TRENTON - Lawmakers aren't any closer to a deal to stave off financial disaster in Atlantic City, as an hour-long meeting Wednesday between two of New Jersey's top elected officials failed to yield any meaningful progress.

Senate President Stephen Sweeney (D., Gloucester) said he was worried the city could go bankrupt without a state takeover.

"You can see the ship getting ready to hit the rocks," Sweeney told reporters after he met with Assembly Speaker Vincent Prieto (D., Hudson) in the senator's Statehouse office. "It's not good."

The two legislative leaders have proposed competing plans to rescue Atlantic City, which is running a $100 million deficit on a budget of about $250 million, carries $550 million in debt, and is almost out of cash, according to the Christie administration.

"I publicly offered a compromise. I have privately offered a second compromise," Sweeney said, though he declined to disclose the concessions. "The speaker and I have concerns. Mine, I think, are more serious. He doesn't believe Atlantic City can go bankrupt. I do."

Prieto, who spoke separately with reporters, offered a more upbeat assessment of the meeting: "We're talking, which I think is good."

However, they didn't agree on everything that was said during the meeting. "According to the speaker, no new private offer was made by the Senate president," spokesman Tom Hester said in an email after learning of Sweeney's remarks.

Sweeney, backed by Christie, supports a takeover of the city government and a payment-in-lieu-of-taxes system for its eight casinos to stabilize the property-tax base.

The Senate passed those bills last month. Prieto has refused to post them for a vote, saying the takeover legislation would treat public employees unfairly by allowing the state to modify or terminate unions' collective-bargaining agreements with the city.

"Collective bargaining cannot be the first thing on the chopping block," Prieto told reporters, adding that the state has had a measure of fiscal control over Atlantic City since 2010.

The governor said Wednesday night that "my understanding is that [Sweeney and Prieto] met today," and "in fact went backwards."

Christie, who appeared on NJ 101.5's Ask the Governor, said Sweeney had "moved significantly" toward a compromise in his proposal last week to give Atlantic City a 130-day reprieve from a state takeover.

The Republican governor said Prieto couldn't claim he had a plan for Atlantic City unless the speaker posted his bill for a vote: "You can't say you have an alternative when you haven't passed it out of your own house."

Sweeney said last week that he would give the city until the end of the summer to adopt a plan to cut its budget in half before pushing for a takeover.

The speaker wants to give the city two years to meet certain fiscal benchmarks before the state would gain the authority to break labor contracts and other powers.

Prieto also said it was unrealistic to expect the city to make the deep budget cuts Sweeney wants. "If you fired every employee, you would still not get there," Prieto said.

Sweeney challenged Prieto to post the speaker's bill for a vote in the Assembly "to show that he can pass it." Otherwise, Sweeney said, Prieto should hold a vote on the takeover bill.

Under New Jersey law, the state would have to approve the city's filing for bankruptcy. Christie, a Republican, has said he would not allow that to happen.

Sweeney suggested Christie's position might change "if it gets to a point where the state has to step up to the plate and write millions of dollars worth of checks."

At the Atlantic City Council meeting Wednesday night, Councilman Kaleem Shabazz, who has taken numerous trips to Trenton to lobby for a resolution to the city's crisis, said he was still hopeful there would be a resolution.

"I'm optimistic it can be worked out," Shabazz said.

He also said he hoped Sweeney would sponsor legislation to repeal the requirement that the city provide pensions to lifeguards, which would save about $1 million annually.

Other council members indicated that bankruptcy was still on the table. Councilman Frank Gilliam Jr. said that legislation and aid would do nothing to address the city's debt.

"If we can get most of our debtors around the table to talk," he said, it might lead to some progress. He said the council should continue to consider Chapter 9 bankruptcy as an option.

In the meantime, the council passed a temporary budget, and revenue director Michael Stinson reported that the city's permanent budget was still "in flux."

aseidman@phillynews.com

856-779-3846 @AndrewSeidman

Staff writers Maddie Hanna and Amy S. Rosenberg contributed to this article.