Don Guardian was a horrible mayor who killed any hope of an Atlantic City recovery with $400 million of unsustainable debt, and tax rates that have reached confiscation levels.
Guest Post by Seth Grossman of LibertyandProsperity.com
Soon after winning the election in November, 2013, Guardian promised “no layoffs” or salary cuts for City employees and talked of running for second term. Guardian had a lavish inauguration ball. It was paid by “donations” from New Jersey’s biggest “pay to play” lobbyists and special interests.
When Mayor Guardian took office in January 2014, Atlantic City had lost two thirds of its tax base. Yet the City and its public schools were still spending the same amount of money each week as they did during the height of the casino boom. This was in complete violation of the Local Budget Law which requires every city, town and school district to have a balanced budget.
Why Does GOP Want Don Guardian for NJ Assembly?
In 2016, Guardian did not even propose any City Budget until our organization sued him. When Guardian finally introduced his budget that was due in early April, it was already September and three fourths of the City’s money was already spent.
The debts Mayor Guardian incurred to fund illegal deficits boosted Atlantic City real estate taxes to levels that are unsustainable for most non-casino home and business owners. Casinos, Bass Pro Shop, 108 shops at the Walk, and roughly 2,000 public and “affordable” housing units make “Payments In Lieu of Taxes (PILOT)”. They do not to pay any of that debt.
Tax rates in Atlantic City are so high, many property owners find it cheaper to ignore their taxes. Let the City foreclose on their property in 3-4 years. Meanwhile, they do business or collect rent without paying for any taxes or repairs.
As fewer people pay taxes, rates go up even more.
When the City lost two thirds of its tax income, Mayor Guardian refused to cut spending.
At first, Mayor Guardian “balanced” his budget by letting the City’s tax assessor tax casino properties for far more than what they were worth.
When the casinos appealed their taxes, Guardian paid big fees to lawyers to fight the casinos. When the casinos won their appeals and got their taxes reduced, Guardian spent more money on lawyers to appeal and delay the tax reductions.
When Guardian and Atlantic City lost its cases against the casinos, it had to borrow hundreds of millions of dollars to give them refunds.
Later, Republican Governor Chris Christie allowed Mayor Guardian to borrow money for operating expenses, in direct violation of the New Jersey’s Local Budget Law. That law requires balanced budgets.
City governments in New Jersey can only borrow money for things like buildings, equipment, and street improvements. The law does NOT allow them to borrow for “operating expenses” like salaries.
During 2016, Mayor Guardian failed to pay roughly $38 million for employee health benefits and pension contributions that came due. He then made false public statements and signed fraudulent budget documents to hide it for more than a year. Then the City had to pay the money back to the state at 8.5% retroactive to the beginning!
When Atlantic City taxes got so high that even the casinos complained that they could not afford them, Guardian agreed to state legislation that gave them tax breaks. This was in direct violation of the New Jersey State Constitution which requires that all real estate be “be assessed equally and taxed at the same rate”.
New Jersey’s State Constitution does allow certain exceptions. For example, tax reductions can be given to veterans, senior citizens, farmers, and for “redevelopment” of “blighted” areas.
To give the casinos these tax breaks, Mayor Guardian and state legislators declared Atlantic City casinos to be “blighted” areas “in need of redevelopment”.
During Guardian’s last year in office, Republican Governor Chris Christie appointed the law firm of his friend Jeff Chiesa to “oversee” Atlantic City’s finances. Chiesa’s law firm billed and received roughly $7 million in fees from Atlantic City taxpayers. Many of those fees were excessive and improper.
For example, Chiesa billed the City at lawyer rates for lawyers who did non-lawyer work. Chiesa never set up an office in City Hall. His employees billed the City top dollar for driving between Atlantic City and Chiesa’s North Jersey office.
Chiesa billed Atlantic City taxpayers for having more than one of his employees at the same meeting. Don Guardian did not challenge any of these bills, and paid each of them in full.
At one time, public officials who spent public money in violation of New Jersey’s Local Budget Law were prosecuted and removed from office for “misconduct in office”. However, Republican Governor Chris Christie was running for President at the time, and did not want embarrassing publicity from layoffs and disputes with public employee unions.
At that time, one of Christie’s main opponents was Republican Governor Scott Walker of Wisconsin. At that time Wisconsin public employee unions were organizing protests and riots opposing Governor Walker’s spending cuts there.
Don Guardian rarely talks about any of this. It seems he still has no awareness of how his four years of blatant disregard for budget laws put Atlantic City property owners in a hopeless situation.
It appears that only a bankruptcy or repudiation of all or part of Atlantic City’s $500 million debt can bring real estate taxes down to affordable and sustainable levels.
Ironically, New Jersey State Government now has unsustainable spending, and roughly $250 billion of state debt and pension obligations that that taxpayers cannot afford.
New Jersey State government today is in the same financial mess that Atlantic City was in when Don Guardian became mayor seven years ago.
That is why Don Guardian can’t be trusted to be a legislator at the state level today.
Seth Grossman, Executive Director