Future Of NJ Takeover Of AC Still Up In Air As Governor Hires Election Foe

Written By Bart Shirley on February 27, 2018

Gov. Phil Murphy has made an interesting hire early in his tenure.

A new person in the AC mix

Murphy hired former election foe Jim Johnson as special counsel for his administration. Johnson will focus his attention on the state’s administration of Atlantic City.

Murphy hired Johnson after defeating him in 2017’s Democratic primary for governor. Johnson, a prominent attorney, will review the city’s current litigation and make recommendations to the governor’s office.

The goal of Johnson’s recommendations will be the ultimate return of Atlantic City’s administration to its local officials. Johnson will perform his duties for $1 salary per year.

Jeffrey Chiesa, who led the takeover under Gov. Chris Christie, reportedly charges New Jersey taxpayers $400 per hour for his services. Chiesa is not being replaced by Johnson, however, it seems.

Atlantic City officials grumble about the state’s actions

However, Johnson’s entry into Atlantic City affairs is already ruffling feathers on all levels of the city’s governance. Atlantic City Mayor Frank Gilliam decried the hire as an unnecessary addition.

He called the presence of special counsel “another layer of bureaucracy” and “overkill.” He also stressed the need to involve local stakeholders in the process.

To that end, Murphy met with Gilliam two weeks ago to discuss the state-city relationship. The takeaway at that time was that the governor desired a partnership with city officials, rather than heavy-handed oversight.

However, city officials are not finding sympathetic shoulders in the new administration. Atlantic City Council President Marty Small reported that the governor’s office rejected loan forgiveness for the city’s massive debt, telling Small that the city would have to pay the debt off itself.

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The new bond ordinance both helps and worsens the problem

City leadership is working on solutions to the mounting expenses. On Feb. 22, the City Council approved a bond ordinance to help pay off deferred pension and health-care contributions from 2015.

The 6-3 vote authorizes the issuance of $55 million in bonds to cover the $47 million owed. However, the vote came after a discussion between the council and 13 Atlantic City residents.

All 13 residents opposed the ordinance as merely adding to the debt, even though the bonds would prevent a rise in local taxes. The bonds would raise the total city debt to almost $400 million.

Concerned citizens also expressed irritation about the need for the ordinance and questioned the wisdom of the deferment in the first place. Worse, the deferment occurred due to pressure from the state, whose officials urged the move.

Only time will tell if the state’s withdrawal is tenable in the near future. However, the state is likely staying put if city plans are to add $55 million to the city’s debt.

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Bart Shirley

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.

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