Who Will Save Atlantic City? Certainly Not Carl Icahn And Chris Christie
New Jersey voters reelected Chris Christie with their eyes open; after a first term of breathtaking-- even for New Jersey-- corruption and non-stop, unabashed catering to Big Bucks special interests, they knew exactly what they were getting. And now the chickens are coming home to roost. New Jersey's economy is in turmoil as their governor spends his time jockeying for position inside his crazy right-wing ideological political party. This is falling hard on working families all over New Jersey, but right now it is absolutely devastating Atlantic City, whose vibrant gaming and tourism industry Christie had pledged to protect and make prosper.
Carl Icahn is just the kind of billionaire vulture capitalist who Christie gravitates to; working with predators like Icahan to disadvantage unions is his vision-- his only vision-- of building an economy. Today Icahn is threatening to shut down one of the major Atlantic City hotels unless he gets huge tax breaks from the state. "Carl Icahn is not the savior Atlantic City so desperately needs," editorialized the Courier-Post yesterday.
The billionaire investor, who controls the Taj Mahal, has offered to rescue the struggling casino. He’s willing to invest $100 million-- but only if owner Trump Entertainment Resorts can get $175 million in aid from New Jersey and Atlantic City and if the company can get out of paying into workers’ pensions and health insurance to the tune of $14.6 million a year.State Senator Ray Lesniak (D-Elizabeth) is a Jersey reformer who's battled the transactional, transpartisan political bosses for his entire career. He's probably best known for his pioneering environmental bills like the Environmental Cleanup Responsibility Act, the Safe Drinking Water Act and the Pesticide Control Act and for an across-the-board progressive vision for the state, from marriage equality to abolishing the death penalty. But Lesniak, who won his last reelection battle 75.5- 24.5% and is the chairman of the Senate's Economic Growth Committee, has been the force behind a plan to legalize (and regulate) sports betting in Atlantic City casinos-- the same way it works in Las Vegas.
The state said no. The city said no. And the workers said no. But while Senate President Stephen M. Sweeney and Mayor Don Guardian have held firm in refusing to throw good money after bad, the 2,953 people who keep the casino running have far less power. U.S. Bankruptcy Judge Kevin Gross ruled last month that Trump Entertainment could cancel its collective bargaining agreement with UNITE HERE Local 54, eliminating the company-sponsored pension and health plan.
Instead, workers will get a 401(k) and an extra $2,000 to buy insurance through Medicaid or the Affordable Care Act health exchanges. Generous, isn’t Icahn, to allow taxpayers to share the honor of subsidizing compensation for rank-and-file workers while scaling back the company’s investment in them?
...In an open letter to the members of Local 54, he cast himself as a perpetual underdog who is the casino’s only hope... As a man who is not afraid to stand up to low-paid workers in order to maximize shareholders’ profits.
Rather than present the concessions he seeks as an investment in a more prosperous company that will benefit workers and Atlantic City in the long run, Icahn uses threats and speculation to cow them into giving him what he wants. Unfortunately, his plan to turn workers against their union and government against government seems to be working.
On Monday, Taj Mahal employees begged Mayor Don Guardian to reconsider. Guardian declined, noting that the company had already received massive tax breaks before it stopped paying its taxes. Yet while he’s drawn the line at giving any more of his suffering city’s money to a foundering company, he’s still trying to get the state to step in with a solution.
Given what Atlantic City has been through this year-- losing four of its 12 casinos and shedding some 8,000 employees-- no one wants to be standing near the next domino when it falls.
State Senate President Steve Sweeney has taken on Icahn and says he's working tp prevent Atlantic City from becoming "another Detroit." Last week he said he's introducing legislation that would redirect casino tax revenue to keep the city and schools running, and require casino operators to provide health benefits for their employees as a condition of holding a state license.
Highlights of the proposed legislation include:Icahn says if he doesn't get his way, he'll shut down the casino on December 12, laying off a thousand workers and delivering another ghastly blow to Atlantic City's and New Jersey's struggling economy. To much power for the one percent? For decades, Icahn has built his immense fortune using the bankruptcy process to hurt workers and destroy companies. Workers say the current crisis in Atlantic City is the latest one that Icahn has created and profited from. But to Chris Christie, he's... a job creator.
• Requiring casinos to pay $150 million in lieu of property taxes for two years so city officials would know how much they could count on to pay the bills, with future payments tied to gaming revenues instead of property taxes.
• Redirecting about $25 million to $30 million a year from the investment alternative tax to pay down the city’s debt. Casinos pay a 1.25 percent on gross gaming revenues and 2.5 percent on internet gaming revenues to pay for economic development programs. About $30-$40 million is sitting in an account unspent.
• Finding $72 million in “cost savings” from the cost of running city government and the board of education.
• Amending casino licenses to require operators “provide a baseline health care and retirement package” for their workers, in response to the judge’s decision last month to allow Taj Mahal billionaire investor Carl Icahn to void its contract with the union.