BUSINESS & ECONOMY

Sweeney Offers Plan to Save AC

By Brenda Flanagan
Correspondent

“I think it’s terrible. It’s terrible for the people who’ve been working here all their lives,” said tourist John Mickelsen.

Even the tourists commiserate with casino workers at the floundering Taj Mahal. The union’s suing Taj. Taj management’s threatening to shut the place down. But, wait. Here comes Senate President Stephen Sweeney with a proposal to rescue the Taj, the faltering casino industry and beleaguered Atlantic City.

“What I’m trying to do is work with the industry and demonstrate there are ideas and plans to fix this,” Sweeney said.

Sweeney’s plan would stabilize local taxes and revenues to attract investors and shore up the city’s economy. Right now, Atlantic City’s bond rating is junk — according to Moody’s — and it’s suing bankrupt casinos over unpaid taxes. Developers won’t commit.

“There are so many moving parts, it becomes very difficult to attract investment, and that’s why to the extent a proposal provides stability, it’d be very helpful,” said Israel Posner.

Casino industry analyst Posner says the city’s chaotic tax structure pushes new investors away and hurts surrounding businesses. With four casinos closing this year, United Airlines recently canceled flights into the local airport.

“I need to know I’m going to be assessed in a way that’s objective and fair so that I know if the investment I’m going to make is going to be swallowed up by taxes,” Posner said. “Is it a capricious type of situation where I don’t know what my tax will be based on a tax appeal I filed, an award, by a court, is it negotiated?”

“They’re more than willing to help Atlantic City, but not help the casinos. It’s to solidify Atlantic City government that’s out of control and spiraling downward,” said Sweeney.

Sweeney’s plan in part would require casinos to make fixed payments in lieu of taxes. Then tie future payments to revenues, instead of property taxes. It’d also divert $30 million in annual casino taxes currently earmarked for local development and redirect it toward paying down the city’s debt. It’d require AC to find $72 million in cost savings in city and school budgets and it’d require the casino industry to provide baseline health care and retirement benefits for its employees.

“It’s about time we have a baseline in the casino industry in Atlantic City,” said Local 54 Union President Bob McDevitt.

McDevitt welcomes the baseline benefits proposal as long as it’s a substantial improvement over offers made by multimillionaire Carl Icahn. Icahn’s offered to buy the Taj — but only if the union surrendered its benefits.

“We’re here to support the industry, but we’re not gonna be enslaved by the industry. And that’s what Mr. Icahn’s asking right now. If he backs off that, we can work something out,” McDevitt said.

“We need to reexamine everything — to make sure the money’s well spent — that we get the biggest bang for everybody’s buck,” Sweeney said.

Tomorrow officials will gather for the second summit meeting called by Gov. Chris Christie to come up with a winning strategy to move Atlantic City out of the red and into the black.