After meeting with Atlantic County Executive Dennis Levinson, Christie held a news conference in Atlantic City and reiterated his warning that the cash-strapped city is only going to see meaningful aid from the state to resolve its crippling debts if pending legislation is passed that allows the state to take over and change elements of the city’s finances.
The governor, who has criticized Atlantic City Mayor Don Guardian and State Assembly Speaker Vincent Prieto, D-Hudson/Bergen, for opposing recovery measures because of what a takeover might mean for the city’s unionized public-sector employees, said the city’s wasteful spending and failure to act responsibly caused a recent credit downgrade that puts it on the same level as Puerto Rico.
“Atlantic City is running out of money. It will run out of money. It will not make its debt payment, and that negative spillover will go on to other New Jersey cities across the state,” Christie said. “Newark, Jersey City, Paterson, Camden, Union City, Trenton will all face potential downgrades of their debt because of the failure to lead in Atlantic City and the failure to stand up for this iconic city.”
The governor’s warning comes just a day after Moody’s said the credit ratings on bonds for other distressed cities in New Jersey could be impacted because Christie has expressed a willingness to restructure Atlantic City’s debt obligations, which “calls into question the state’s future willingness to support these cities.”
For weeks, Christie has traded barbs with Guardian and Prieto over what sort of rescue package the state can and should implement to help the struggling resort town come out from the financial distress caused by declining gaming revenues and the closing of casinos.
Assembly Democrats are urging Christie to act on the powers they say he has under current state laws to bail out Atlantic City, which will have to shut down nonessential government services in April without state aid.
But Christie has said the city will only see relief through bailout legislation that grants the New Jersey Department of Community Affairs' Local Finance Board the power to, among other things, consolidate departments, sell city assets and renegotiate collective bargaining agreements — which has already been approved by the New Jersey Senate.
“It will not be signed by me if it is sent to me without the exact legislation passed by the Senate on intervention in the city,” Christie said Wednesday.
The governor directed blame for the city’s woes on what he says is out-of-control municipal spending, the city’s unwillingness to let Atlantic County take over certain municipal tasks and its unwillingness to reduce the salaries of overpaid municipal employees.
Christie also faulted Mayor Guardian for going back on an agreement he reached with the governor and Senate President Steve Sweeney, D-Gloucester, in January, in which he voiced support for the takeover measures.
“He’s putting his city, an iconic historic city in this country, at risk, and he’s putting the creditworthiness of a number of other cities in the state of New Jersey at risk at the same time,” Christie said.
In another news conference across town, Guardian explained that the city’s financial problems have not been caused by profligate spending, but by the huge loss of casino revenues. He also said a county takeover of various public services could be more costly to the city.
Guardian added that he is not a "liar," as Christie had indicated earlier, and explained that he was misled by Sweeney with regard to what a final recovery package would entail, as he was promised that final legislation would create a close partnership between the state and local government to reach various fiscal benchmarks.
--Editing by Bruce Goldman.
