USA.SlotsGalores

State lawmakers will hold separate hearings Monday focusing on
the future of Atlantic City.

The city’s two hemispheres — its government and its casino
industry — will be scrutinized by a string of legislators in two
hearings this afternoon — one potentially leading to more state
oversight, the other looking to relax regulations.

The first, assembled by state Sen. Jim Whelan, D-Atlantic, who
served as Atlantic City’s mayor from 1990 to 2001, will feature
in-depth testimony from State Comptroller Matthew Boxer, Whelan
said. Boxer’s office issued a scathing report last month outlining
more than $23 million wasted through neglect and mismanagement in
Atlantic City’s government.

Soon after Whelan’s hearing commences at 1 p.m., another
committe will assemble at 2 p.m. to examine the benefits to easing
state gaming regulations.

“It’s a very critical day for the city,” said Assemblyman Vince
Polistina, R-Atlantic.

Atlantic City’s casino industry saw overall revenue losses of
more than 13 percent last year, its government leaders have
projected a $35 million budget deficit this year, and the advance
of nearby casino competitors has grown to produce more slot-machine
revenue, according to figures from December.

The flurry of bad news has been met with growing concern about
the fate of one of the state’s most vital economic engines. Much of
the Trenton focus has been building since the election of
Republican Gov. Chris Christie and has led to Monday’s
hearings.

A newly-convened Assembly committee on gaming and regulatory
oversight Monday will begin a series of meetings to consider what
regulations to scrap. The committee also may hear from casino
executives.

Assemblyman John Burzichelli, D-Salem, Gloucester, Cumberland,
who chairs the committee, said his group would tackle the mesh of
gaming regulations.

“There’s no doubt that casino regulation will come up sooner
rather than later, because it’s our most heavily regulated
industry,” he said.

Coming on the same day that the state comptroller explains his
findings on Atlantic City’s municipal spending failings,
Burzichelli’s hearing on regulatory reform shows a concerted effort
among legislators to tackle the city’s municipal and industry woes
at once.

Whelan did not say what type of assistance the state should
provide to Atlantic City’s government but made it a point to
reference recommendations from Christie’s trasnsition team calling
for a fiscal overseer to reign in Atlantic City’s spending.

Still, Whelan said he wants to wait to for the results of his
hearing and learn what the governor’s plans are.

Liaison or monitor

Meanwhile, other regional politicians are hoping to educate the
governor.

Polistina told The Press of Atlantic City on Friday that he
recently suggested the governor enlist an “Atlantic City liaison”
to act as a monitor over the city’s finances. Polistina compared
the potential role with state monitors in the urban Abbott school
districts. The monitors — such as Mark Cowell in Pleasantville -
hold veto power over expenditures.

“Initially I think it would be somebody to work with the
(Langford) administration,” he said. “Of course, if we don’t get
the results we’re looking for, (the monitor) would then have an
increased role.”

Polistina and districtmate John Amodeo, R-Atlantic, sent their
suggestions to Christie in writing and have had further discussions
with members of the governor’s administration.

“We haven’t gotten any feedback yet from the administration or
the governor,” Polistina said.

Whelan also has shown a preference to limit the city’s autonomy
in the past. He led a successful effort in 2008 to require state
approval of any sale or lease of Bader Field, a former Atlantic
City airport primed for casino development. The effort came after
it became the lead character in a bribery scheme that ensnared
three City Council members.

But Mayor Lorenzo Langford, who will likely testify during
Whelan’s hearing Monday, said he does not believe intervention is
the state’s objective.

“I don’t accept the notion that the state is interested in
controlling Atlantic City,” Langford said last week. “From all that
I’ve heard, the state is interested in working in cooperation with
Atlantic City for our collective interests. They understand we are
vital to the state’s economy. We are the goose that laid the golden
egg.

“If any entity, the state or anybody else, tried or were
desirous of coming in and trying to control Atlantic City,
obviously I’d have a problem with that. But I don’t see it as
control. I see it as cooperation.”

Langford may hear some displeasure among committee members
Monday over his response to the state audit, which dismissed
connections drawn between Atlantic City’s governmental “ineptness,”
as he put it, and the slumping casino industry.

He referenced one audit finding about the improper use of the
city’s 11 council aides, rhetorically asking if the positions were
abolished, “Would that result in a line of people knocking at our
doors ready to come to the city and invest?”

“Technically, the mayor’s right,” said Atlantic County Executive
Dennis Levinson, who will send his chief of staff to the hearing.
“But with a comment like that, he just doesn’t get it.”

No one says the two issues — government and the casinos — are
connected more than Christie himself.

Christie linked the city’s actions and the limited hopes for the
industry’s regrowth in his response to the state audit last
month.

Businesses, he said, “are really worried about further
investment in a city that is apparently so poorly managed and is
not providing the type of city services it needs, despite the
enormous amount of tax revenue that’s thrown off by these
businesses.”

1996 vs. 2010

Although attention at the state level has increased, the
problems within city government are all too familiar.

Many of Boxer’s criticisms are similar to findings from a state
audit in 1996, issued during the second of three terms Whelan
served as Atlantic City’s mayor.

Both audits found millions in uncollectable debt, a
near-inactive foreclosure process, disastrous management of the
city’s payroll and personnel and endless money wasted on the abuse
of sick leave in the city’s Police Department.

Whelan defended his administration’s response to the 1996 state
review, which included privatizing the city’s garage and saving
nearly $1 million in the 1997 budget as a result.

“It’s a nice theory to think that you’re going to go out and do
everything that they recommended,” he said. “But life doesn’t work
that way. Politics doesn’t work that way.”

As for changes in casino regulations, industry representatives
are expected to testify during the Assembly committee’s
proceedings.

As the committee considers a constitutional amendment allowing
the state to introduce sports-betting if federal regulations were
changed, several casino lobbyists or CEOs are likely to attend and
offer opinions about the direction of gambling regulation.

Changes in gaming regulations would not be made without
consultation with the governor’s new commission on gaming, sports
and entertainment, Burzichelli said Friday.

“If the commission comes to us with any recommendations as far
as affecting gaming, we would take their guidance on that and would
act,” he said. “They’re taking a global view — but our committee
will be looking at the gaming side in-depth.”

Contact Michael Clark:

609-272-7204

Michael.Clark@pressofac.com

Contact Juliet Fletcher:

609-292-4935

JFletcher@pressofac.com

Sticking with tradition

The recent state audit examining the operation of Atlantic
City’s government shares similar findings with a state review
released about 14 years ago:

Foreclosures

1996: “A dedicated effort must be undertaken” to accelerate the
city’s foreclosure on millions in tax-deliquent land.

2010: The city has failed to foreclose on $9 million worth of
tax-delinquent land dating to 1975.

Extended sick leave

1996: Police officers can accumulate unused sick days during
their careers, leading to large payouts upon retirement.

2010: Millions are still wasted on extended leave and buyouts in
the Police Department.

Payroll

1996: “There appears to be little control of comprehensible
time, variations in procedure for recording work time, and
significant discrepancies exist between wages paid and wages
earned.”

2010: “Atlantic City’s payroll and personnel practices are
inadequate, resulting in the potential for abuse.”

Mercantile Division

1996: “Overall, the review team found the entire mercantile
process to be inefficient, ineffective and costly to the
taxpayers.”

2010: “Long-standing practices have made the city’s Mercantile
License Section ineffective and wasteful.”

Who’s on Atlantic City’s case?

Gov. Chris Christie — Just two weeks in office,
he took what he called “aggressive action” Wednesday to address a
spectrum of issues tied to gaming, sports and entertainment.
Founded an advisory commission that must make policy
recommendations for Atlantic City gaming, as well as state
management of racetracks and stadiums, by June 30. Previously said
the state’s audit of the city raised “extraordinary concerns,” and
said if the municipal government “doesn’t get its act together,
it’s very difficult for the state of New Jersey to encourage more
growth and more development in Atlantic City.” But his position on
whether to allow any form of gambling — including slots or VLTs —
outside Atlantic City also has sounded more guarded since he took
office.

Transition Subcommittee on Gaming — Gave a
written report directly to Christie’s transition team about gaming,
horse racing and the lottery. Painted a grim picture of Atlantic
City, both economically and municipally, and cited “local
government’s inability to manage this current reality.” The first
report under the new administration to spell out a connection
between Atlantic City’s excessive municipal waste and the wider
struggle to revive the gaming industry. Also suggested that
horseracing and the lottery may be privatized. The 14-person group,
including Mark Juliano of Trump Entertainment Resorts Inc., David
Satz of Harrah’s Entertainment Inc. and Joe Corbo of Borgata Hotel
Casino & Spa.

Matthew Boxer, state comptroller — Published a
state audit Jan. 27 finding more than $23 million in wasteful
spending. Prompted the hearings that start Monday. City officials
including Atlantic City mayor Lorenzo Langford are expected to
attend and testify.

Sen. Stephen Sweeney, D-Salem, Gloucester,
Cumberland, Senate president – Wrote to Christie on Tuesday
pledging to assist the administration in tackling the problems in
gaming, and pointed out two criticisms of the Casino Control
Commission. Has positioned himself as a key player in voicing
southern New Jersey’s concerns about the declining economic
engine.

Sen. Jim Whelan, D-Atlantic, chairman of the
senate committee on state government, wagering, tourism and
historic preservation – Following the audit findings and the
transition report on gaming, Whelan has taken the lead in exploring
whether the state should have a presence in Atlantic City. Will
chair hearings on the state audit Monday.

Assemblyman John Burzichelli, D-Salem,
Gloucester, Cumberland, chairman of the Assembly committee on
regulatory oversight and gaming – Will chair hearings beginning
Monday reviewing gaming regulations, with a view to scaling back.
Expects casino executives and other experts in the business to
speak sooner rather than later. A key member on that committee is
Assemblyman Vincent Polistina, R-Atlantic.

Lt. Gov. Kim Guadagno — Chairs the Red Tape
Review group, tasked by the governor to look for efficiencies and
overregulation. Burzichelli works with that group, which will send
recommendations to the executive branch.