Thread: New Jersey Government Shuts Down Over Tax Dispute

New Jersey Government Shuts Down Over Tax Dispute

Governor Signs Closure Order; Lottery, Road Crews to Be Affected First

TRENTON, N.J. (July 1) - Gov. Jon S. Corzine closed the state government Saturday amid a bitter dispute with fellow Democrats in the Assembly over his plan to increase the sales tax, moving to close beaches, parks and possibly casinos in the coming days.
After Saturday's constitutional deadline to adopt a new balanced budget passed without agreement, Corzine signed an executive order just after 9:30 a.m., a grim climax to weeks of budget squabbling among Democrats who control state government but haven't been able to agree on a budget bill.
"It gives me no joy, no satisfaction, no sense of empowerment to do what I'm forced to do here," Corzine said.
No formal negotiations were scheduled for Saturday, but Assembly lawmakers are expected to return to the capital city for budget deliberations on Sunday morning.
Within minutes of Corzine signing the order, road construction projects were required to begin winding down. Motor vehicle offices were to close at noon. About 45,000 state employees were immediately furloughed. State courts were closed for anything but emergencies.
State parks, beaches and historic sites were expected to slowly close in the coming days, with all closed by Wednesday. Beaches were staying open through the July Fourth holiday, preventing a more dramatic effect on New Jerseyans' plans for the long weekend.
All horse racing in the state was expected to conclude at 6 p.m.
The order allows Corzine to keep 36,000 state employees working without pay. That will keep the state's prisons, veterans homes and psychiatric hospitals open. Child welfare, state property protection, transportation and environmental safety functions will also continue.
Atlantic City's 12 casinos could be forced to close because they require state monitoring, though the casino industry is challenging that in court.
July welfare checks have already been mailed, said Corzine's chief counsel, Stuart Rabner. But he said next month's cannot be sent unless a budget agreement is reached.
The dispute centers on Corzine's determination to raise the state sales tax from 6 percent to 7 percent to help close a $4.5 billion budget deficit.
Corzine sees the increase as a vital step toward providing reliable annual revenue, but most Democrats in the Assembly - the lower house of the state Legislature - and several Senate Democrats say the plan is unnecessary. Led by Assembly Speaker Joseph Roberts Jr., D-Camden, they offered $741 million in spending cuts and $917 million in other tax hikes to avoid a sales tax increase, but Corzine rejected many of their ideas.
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."
But as the closures took effect, Roberts said Assembly Democrats remained steadfast in their opposition.
"We've been working mightily to convince Gov. Corzine that there are clear, legitimate alternatives to raising the sales tax," Roberts said. "I'm disappointed that he so far has been unwilling to embrace those solutions."
Corzine accepted opponents' proposals for increased corporate taxes, increased tax revenue estimates. He killed hospital bed, alcohol and water taxes they opposed. Corzine also accepted a compromise offered by Senate President Richard J. Codey to use half the money earned by a sales tax increase for property tax relief.
Attending an inaugural party for the Trenton mayor Saturday afternoon, Corzine called the impasse rergrettable. "As this unfolds there will be increasing implications for real people, and that's not desirable at all. It's important for people to understand that you have to compromise. There's a good compromise on the table presented by Sen. Codey. I'd love to use that as a framework."
Roberts, though, questioned the need for any sales tax increase.
Roberts said he hoped to talk with Corzine at some point, noting the shutdown posed an "enormous burden for millions of New Jerseyans." He called the Assembly Budget Committee back to the Statehouse for a 10 a.m. Sunday meeting to craft a budget plan.
"Committee members should expect to work Sunday through Monday so we can bring a satisfactory end to this crisis," Roberts said.
Codey spokeswoman Jennifer Sciortino said Codey has ordered senators to the capital city for a noon Monday session that won't end until the crisis is resolved.
Corzine said he has talked to Assembly members outside of leadership, but wasn't counting votes. He emphasized the Legislature has given him nothing to sign.
"The governor has to have something to act upon before I can act," Corzine said.
The state constitution requires a balanced budget by July 1, but the deadline has been missed four times in five years. Nothing happened when deadlines were missed before because the state never went past the morning of July 2 without an adopted budget. Without one, the state has no authority to spend money.
Corzine said the lack of any imminent agreement gave him no alternative.
Rabner said the administration will monitor the closures and adjust as needed.
"We will continue to re-evaluate," he said.
Republicans, the minority party in both the Assembly and Senate, expressed frustration.
"I'm appalled that this reached this stage," said Senate Minority Leader Leonard Lance, R-Hunterdon. "It is very unfortunate that the Democratic governor and Democratic majorities in the Legislature could not achieve a budget in place by June 30, and now all the people of New Jersey suffer as a result."
07/01/06 17:11 EDT
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Howdy Ruth, Love the avatar!

I believe that gov'ts around the nation are going to have financial crisis.

We have fiat money, are in horrendous debt as a nation and as I have written my lawBreakers, are not seeing responsible spending by our gov't, at most levels.

I couldn't run a household like they are running our gov't.

Hi Pat..................who could run a house like they run the government? I wouldn't want to myself.