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New Jersey proposes $5 billion in cuts as revenues fall 'off a cliff'

TRENTON — State revenues have “fallen off a cliff” in light of the COVID-19 pandemic, and the Murphy administration is proposing $5 billion in cuts, deferred payments and other budget-tightening measures, Treasurer Liz Muoio said Friday.

New Jersey COVID-19 finances

The $5 billion in cuts come on a roughly $40 billion budget overall.

The coronavirus outbreak has clobbered state finances, with income tax receipts falling 5%, sales tax revenues dropping 11% and business taxes declining by nearly 12% for the current fiscal year, Muoio said. The projected declines are steeper for the fiscal year that starts Oct. 1.

“This report is designed to serve as a road map to help New Jersey begin to navigate what is essentially uncharted territory. We are not alone. All across the country, states are facing similar challenges that seemed inconceivable just a few short months ago,” Muoio said. “As a state, we had made great strides over the last two years to improve our fiscal condition. However, the global pandemic sparked by COVID-19 has halted this progress in its tracks. Managing this unprecedented fiscal crisis will require extremely difficult decisions in the weeks and months ahead, and will necessitate a combination of budget and appropriation adjustments, critically needed borrowing and more robust federal assistance.”

Because of a constitutional requirement to enact a balanced budget, Gov. Phil Murphy is proposing cuts for the current year. Among them are $336 million in K-12 aid to schools, $132 million for NJ Transit and $80 million in lead infrastructure spending.

Because of the pandemic, the Democrat-led Legislature and Murphy have extended the fiscal year from June 30 to Sept. 30.

“As we work toward our new Sept. 30 FY2021 state budget deadline, we face an enormous challenge in balancing our wants and needs,” said Murphy. “Revenue losses we can already project are drastic. We need a series of deliberate and responsible measures in place.”

Murphy has also called on federal lawmakers to provide assistance.

“We need Washington to step up with significant direct fiscal assistance for states. Every day, this becomes a more and more bipartisan endeavor,” Murphy said. “But there are just as many minds that remain closed and intractable. One of those closed minds controls the Senate agenda.”

He’s referring to state Senate Majority Leader Mitch McConnell, R-Ky., who at one point suggested states should consider declaring bankruptcy.

Murphy also wants to delay payments. The biggest among them is a $1 billion payment to the public pension fund that moved from September to October under the proposal Muoio outlined Friday.

“We’re approaching a fiscal cliff. We have two choices: toss our state into the abyss or take measures that will allow us to slowly back away from the edge and keep our feet on solid ground,” Murphy said.

Matthew Strabuk / For The Press  

On May 20th, at the Wildwood Beach Patrol Headquarters, Commissioner Steve Mikulski and Chief Steven Stocks talk about the upcoming summer season and the impact on beach safety that the pandemic has had.

Matthew Strabuk / for The Press 

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South Jersey beach patrols adapt procedures for Memorial Day weekend during COVID-19 pandemic

South Jersey beaches, and the lifeguards who stand watch over them, are going to look different during the summer of COVID-19.

In Wildwood, lifeguards will report directly to their stands instead of coming together for a roll call, with all the supplies and equipment they need, Beach Patrol Chief Steven Stocks said Wednesday. There will be only one guard per stand instead of the usual two, with another nearby on the beach or in the water.

“The protocol is going to be sanitize, use, sanitize,” Stocks said, adding guards will be issued neck gaiters that can be used as a mask. “So if you need to use a piece of equipment, you’re going to sanitize it first and then you’re going to use it for the designed purpose and then you’re going to sanitize it again. So that would provide two layers of sanitation before different people touch the same equipment.”

Gearing up for Memorial Day weekend — heralded as the unofficial start of summer — Atlantic and Cape May county beach patrol officials are changing the way lifeguards stand watch, make rescues and interact with beachgoers in an effort to keep everyone safe from the threat of a spike in new coronavirus cases, including providing them with masks and assigning one guard per stand. As is traditionally the case in the early part of the shore season, not all beaches will have lifeguards on duty over the holiday weekend, and many beaches will have limited coverage.

And while all beaches are following guidelines set by Gov. Phil Murphy, each municipality has final say over how it adapts to the orders, making each beach’s plans a little different.

“Our first priority is to protect our guards from the public without compromising public safety,” Margate Beach Patrol Capt. Chuck LaBarre said.

Some of the measures being considered include putting in a rope system or definitive line of six feet between lifeguards, their equipment stand and life boat, and the public, so guards can still answer questions from a distance while keeping an eye on bathers, LaBarre said.

“The one thing I’ve learned in my career in public safety is you’ve just got to adapt and adjust,” he said. “You have to protect the public from themselves. They only see it from their perspective. We want everyone to have fun and keep it as close to business as usual, but that’s going to be impossible.”

Officials are asking that the public keep their distance and wear a mask, and have also planned to restrict bathing between waist and chest deep, he said.

Atlantic City Beach Patrol Chief Steve Downey said beach entrances, of which the city has more than 100, are going to be designated as either an exit or entrance only, and there will be signs on lifeguard stands telling bathers to stay 10 feet away so lifeguards can access their equipment quickly if needed.

“The customer service skills are going to be necessary now,” Downey said. “You’re going to have to be polite when keeping people out of your specific area. We don’t want to be referees.”

But, even as city beaches are free and generally draw large crowds, the weather this weekend may limit the number of people who choose to come out, he said, giving officials and guards a chance to ease in to the new guidelines.

“I can’t see us getting slammed,” Downey said. “We’ll really have to worry when it’s really hot, really humid and the water’s really warm and the casinos open.”

Saturday is expected to have highs in the upper 60s, while Sunday and Monday may reach the low 60s, Press meteorologist Joe Martucci has forecasted. Last year, shore highs were no lower than 75 degrees except for one day.

New Jersey unemployment applicants up by 41,323

About 41,000 more New Jerseyans applied for unemployment benefits last week, the lowest number of new weekly filings since the COVID-19 pandemic began shuttering businesses in March, according to Thursday’s report from the U.S. Department of Labor.

“This is going to be a season that is going to be very different from any other,” Wildwood Commissioner Steven Mikulski said. “The influx of people that everybody is used to will not be here. There may be more day visitors that may be coming down the shore, so probably the parking lots will be a little more crowded, but again, with the influx of people, I don’t see that happening.”

But guards are preparing and training, just as they would every year, with some changes to rescue protocol.

“These guys are professional first responders,” Stocks said. “They understand (personal protective equipment). We’ve been talking about PPE forever. PPE is new lexicon to many people, but for first responders, PPE goes back to when you first start taking CPR training.”

Lifeguards have to assume that every beachgoer they come in contact with for CPR is infected with something, so they use every barrier they can to prevent coming in contact with any of their patient’s bodily fluids, Stocks said, adding that dealing with the new coronavirus isn’t that different for guards.

For CPR, lifeguards will use a bag valve mask that covers a victim’s nose and mouth while another guard does compressions, Stocks said. Both first responders should be in full PPE — eye covering, mask, gown if possible.

Rescues in the water are going to look a little different, too, Stocks said. For normal rescues, two lifeguards would go out, and one would hold onto the rescue can and secure the victim while a second lifeguard swims them in to shore.

“Obviously that’s the kind of contact that we need to avoid now,” he said. “So the guards are trained now to pass the can to the victim and say, ‘Hold on’ if they can, ‘You have to hold on.’ If they can’t hold on, you’re going to have to get in there and secure them.”

Then the guard will backstroke toward shore, keeping the victim calm, he said.

Overall, Wildwood has an advantage in that its beach has ample room for bathers to spread out in accordance with social distancing guidelines. Stocks said it’s about ¾ of a mile from the water to the Boardwalk.

“If there’s a beach in South Jersey where you can practice safe social distancing and enjoy the sand, the sun, the beautiful ocean, Wildwood is the place,” Stocks said, looking out the second-floor window of the Beach Patrol headquarters. “Because that sand that’s here in front of us is unlike any other beach in South Jersey.”

What South Jersey beaches will have lifeguards this Memorial Day weekend?

For NJ boat captains, capacity increase is 'a start'

For New Jersey boat captains, some help in paying their bills appears to be on the horizon.

Six days after signing an executive order allowing charter fishing services and for-hire vessels to reopen at a capacity of 10 people per boat, Gov. Phil Murphy on Friday signed another order increasing the capacity of all outdoor gatherings to 25.

“The capacity of my boat is 72 people,” said Downe Township Deputy Mayor Mike Rothman, who is also the owner of the Bonanza II, a for-hire fishing boat docked in Fortescue. “Now I’m down to 25, which is fine. I have no problem with this. It’s a start. That’s huge for us.”

Rothman said his trips through the end of May have been booked, and more calls are starting to come in from people eager to get out of the house and go fishing.

The order also allows the reopening of public and private recreational campgrounds. Other outdoor businesses, including outdoor batting cages and driving ranges, will have the same capacity.

“We are able to confidently make this decision today because of the hard work that each and every one of you has put in through social distancing to relieve the stresses on our health care system,” Murphy said during his daily COVID-19 briefing. “Because you have taken to heart all that we have asked you to do, and the faith you have put in us to make the right decisions to safeguard public health, we can take this step together.”

Because of the increase, Starfish Boats owner Bob Rush won’t have to increase fares aboard his two boats, which can house up to 150 and 40 people, respectively. Normally $80, the trips would have gone up to $120 per person just to break even with the prior restrictions, Rush said.

“It is a satisfying, small victory,” said Rush, who is also president of the United Boatmen of New Jersey and a member of the state Marine Fisheries Council. “It’s a step in the right direction to opening up the fishing industry of New Jersey.”

Before last Saturday’s Executive Order No. 146, which reopened fishing services at the 10-person capacity, United Boatmen and the Recreational Fishing Alliance sent a proposal to the Governor’s Office detailing all the steps that would be taken to ensure safety and social distancing on boats.

With demarcations in place, Rush’s larger boat, for example, would have a capacity of 50 people on its lower deck. He, along with captains and owners all over the state, expected the proposal to be approved. When Murphy announced the 10-person limit, both Rush and Rothman said they were blindsided.

Rush predicted many businesses would not have made it through the season if they could only allow 10 people per trip.

Throughout the past week, the organizations have continued pushing for the governor to ease restrictions. With the support of state representatives, including state Sen. Mike Testa and U.S. Reps. Jeff Van Drew and Frank Pallone Jr., Rush said the organizations changed their approach in talks with the Governor’s Office.

“If a bus can take 50% of its passengers, and a ferry and a plane are able to do it, how come our boats can’t?” Rush said. “Our boats are outdoors.”

Like Starfish, other businesses were considering raising their prices to try to make ends meet. Rothman said the Bonanza II was going to stay at $75 per person anyway because so many in the state rely on fishing to feed their families.

“At least this will keep it affordable to the people that matter most with it, and have a smaller impact on people,” Rothman said.

The captains are hopeful restrictions will continue to ease because every day is crucial in their industry. Fish seasons come and go, and most of their businesses have already lost four weeks of fishing that are impossible to make up. Fluke season, for example, began Friday.

“You’re never going to get that back,” Rothman said. “It’s gone.

“Now, it’s just everybody putting their best foot forward and making good with what’s in front of us now.”

GALLERY: Charter boats prepare to set sail

AP breaking top story
Virus closings send Atlantic City casino profits down 65%

ATLANTIC CITY — The city’s casinos saw their gross operating profits fall by more than 65% in the first quarter of this year, according to figures released Friday.

The statistics cover only the first two weeks of casino closings due to the coronavirus outbreak; second-quarter earnings are sure to be worse because the casinos have been shut all of April and, so far, May, with no reopening date scheduled.

The figures from the New Jersey Division of Gaming Enforcement show the nine casinos collectively posted gross operating profits of $29.6 million in the first three months of this year, down from $85.6 million in the same period last year.

The big decline is “not surprising, given that most casinos continued to pay employees for two weeks after the shutdown,” said Jane Bokunewicz, coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University. “With only internet gaming and a small amount of sports betting revenue to offset payroll expenses, a significant decrease was inevitable.”

Three casinos swung from a first quarter profit last year to a first quarter loss this year. Bally’s Atlantic City went from a $2.8 million profit in 2019 to a loss of over $8 million this year; Caesars Atlantic City went from a $10.8 million profit to a $593,000 loss, and Resorts Casino Hotel went from a $3 million profit to a $3.4 million loss.

Harrah’s Resort saw its profit decline from $16.5 million last year to $2.9 million this year; Tropicana Atlantic City’s profit fell from $16.5 million to $7.1 million, and Borgata Hotel Casino & Spa fell from $39.7 million to $22.6 million. Golden Nugget Atlantic City’s profits declined from $9.2 million to almost $7.3 million.

Hard Rock Hotel & Casino Atlantic City showed an operating loss in both periods but improved its performance this year, posting an operating loss of $4.2 million in the first quarter this year, compared with a loss of $6.1 million last year.

The same dynamic held true for Ocean Casino Resort, which had an operating loss of $574,000 in the first quarter this year compared with its loss of $11.5 million in the same period last year.

Gross operating profit reflects earnings before interest, taxes, depreciation and other expenses, and is a widely accepted measure of profitability in the Atlantic City gambling industry.

Gov. Phil Murphy ordered the casinos closed March 16, affecting the last two weeks of the quarterly earnings reporting period. But that period included what might have been a prosperous period for the casinos, particularly their sports betting operations.

The NCAA college basketball championship tournament was just about to get underway. But it, like virtually all major sporting events, was canceled due to the virus outbreak.

Casinos have continued to take in money through internet gambling, and, on a much smaller scale, sports betting, with obscure events like Belarusian soccer or Russian pingpong providing betting options.

Two internet-only entities saw their operating profits increase during the quarter. Caesars Interactive-NJ saw a $3.7 million profit, up 36.5% from last year, and Resorts Digital had an operating profit of $2.6 million, up 45% from last year.

The casinos’ collective net revenue decreased by 14.5% to $595.7 million for the first quarter of this year.

Hotel occupancy was 68.1%, which is 4.5% lower than the first quarter of last year.

Borgata had the highest average room rate at $175.76, while Resorts had the lowest at $92.92.