New Jersey Government Shuts Down

By Tom Hester Jr.
Associated Press
Sunday, July 2, 2006

TRENTON, N.J., July 1 -- Gov. Jon S. Corzine (D) shut down the state government Saturday after a deadline to adopt a new balanced budget expired, bringing road construction projects to a halt and furloughing tens of thousands of state employees indefinitely.

Atlantic City casinos could be forced to close because they require state monitoring, though the casino industry is challenging such a closure in court. And state parks, beaches and historic sites were expected to close Wednesday -- the day after the Fourth of July holiday.

It was a grim climax to a bitter dispute with Corzine's fellow Democrats in the state Assembly over his plan to increase the sales tax.

"It gives me no joy, no satisfaction, no sense of empowerment to do what I'm forced to do here," Corzine said.

About 45,000 state employees were immediately furloughed. The order allows Corzine to keep 36,000 state employees working without pay. Services such as state police, prisons, mental hospitals and child welfare were to keep operating.

A bid by Atlantic City's 12 casinos to get state monitors declared "essential employees" who would stay on the job despite a government shutdown is before an emergency appellate court panel, casino association lawyer John Kearney said Saturday.

Assembly Speaker Joseph Roberts Jr. (D) called the budget committee back to the statehouse for a 10 a.m. Sunday meeting, and Senate President Richard J. Codey (D) has ordered senators to Trenton for a noon Monday session that will not end, Codey's spokeswoman said, until the crisis is resolved.

The dispute centers on Corzine's determination to raise the state sales tax from 6 to 7 percent to help close a $4.5 billion budget deficit.

The governor sees the increase as a vital step toward providing reliable annual revenue, but many Democrats in the state Legislature say it is unnecessary.

Opponents have questioned the need for a sales tax increase, predicting voter backlash and demanding that any increase be reserved for property tax reform.

Corzine complained that budget efforts "have not resulted in the sort of responsible plan the public has a right to expect."

The shutdown marks the first time the state government has had to close because of a budget dispute.

Although the state constitution requires a balanced budget by July 1, the deadline has been missed four times in five years. In each of the earlier cases, the state never went past the morning of July 2 without an adopted budget. Without one, the state has no authority to spend money.

© 2006 The Washington Post Company