ATLANTIC CITY — When state lawmakers finally agreed on a plan last spring to save the nearly broke city, officials touted early retirement buyouts as a way to cut costs without layoffs.
“A big help is going to be the early retirements, especially for police and fire,” Mayor Don Guardian said in May about a compromise state takeover bill. “I think we’ll have 120 all together.”
But what Guardian hoped would be 120 buyouts could now be 120 layoffs. An Early Retirement Incentives, or ERI, program is off the table after a breakdown in negotiations with public safety unions, state officials overseeing the city’s finances said recently.
The state, which took over the city in November, wants to lay off 100 firefighters and 19 police officers to cut costs. The unions have sued to stop the layoffs and cuts to their compensation.
What happened to the buyouts? It depends whom you ask.
The city’s police unions argued in Superior Court last Monday the state took away the buyouts to punish the unions for not accepting an earlier offer.
The state’s attorney blamed union leaders for reneging on a promise to put its offer up for a vote by rank-and-file members.
Guardian has another reason: The buyouts cost money, something the city and state don’t have. He has said he sought state Senate President Stephen Sweeney’s help to pass a bill having the state pick up some of the costs, but “it could only work if the governor was going sign it.”
Ronald Israel, who represents Atlantic City state overseer Jeffrey Chiesa in court, referenced a possible ERI deal Monday.
He said the state initially determined the buyouts were not viable, since they would cost either $23 million at once or $47 million over time. Then a lawmaker floated the idea of a bill to have the state pay the $23 million over a decade with no interest.
“That was something the state — not the state designee, but the governor — was willing to entertain,” Israel said.
But the unions wanted recent promotions of senior officers to count toward the buyout packages, giving them larger pensions, Israel said. That broke a deal that would have been better for union members, he said.
“The ERI is off the table because the governor and the Legislature are not going to agree to an ERI,” Israel added. “It’s done. It’s dead.”
The police unions dispute this story. Atlantic City Superior Officers Association President Frank Brennan said the union still had questions about the state’s offer, including whether the promotions would be included. But the state refused to meet again to clarify the details, Brennan said.
And a recent statement issued by three South Jersey lawmakers suggests the Legislature, at least, is still on board with the buyouts.
“The best way, the fair way and the responsible way to right-size the public workforce without jeopardizing public safety is to provide incentives for early retirements,” Sweeney, state Sen. Jim Whelan and Assemblyman Vince Mazzeo said in a joint statement. “It is also the most effective means of alleviating long-term financial pressures on the city’s budget.”
Brennan said the lawmakers’ statement shows Israel was wrong in saying the Legislature won’t agree to an ERI. He said the unions believe the ERI is “right and fair for all involved” as it allows millions in savings while minimizing “harsh, severe cuts” at the Police Department.
“It should be included as the legislation intended,” Brennan said. “Senate President Sweeney, Senator Whelan and Assemblyman Mazzeo confirmed this unequivocally in their statement.”
While Sweeney, Whelan and Mazzeo may want the state to use buyouts, the bill they sponsored essentially lets the state do whatever it wants. The takeover law gave state authority to fire workers and break union contracts, among many other powers.
A spokeswoman for the state Department of Community Affairs said the city cannot afford an ERI without a tax increase. While the takeover law allowed for an ERI, “it was silent about how to finance the incentive,” DCA spokeswoman Lisa Ryan said.
“The state appears to be the only source of funds,” she added. “It is thus off the table and we stand by our statements in court.”