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Budget Deadlock Forces N.J. Governor to Halt Some Services

July 02, 2006|From the Associated Press

TRENTON, N.J. — After Gov. Jon S. Corzine ordered nonessential government services shut down Saturday amid a bitter intraparty budget dispute, the lottery and some road construction projects were the first to go.

State beaches, parks and campgrounds were to stay open through the Fourth of July. But should the impasse extend beyond Tuesday, they too would be closed.

Atlantic City's 12 casinos require state monitoring, but lawyers for the casino industry were challenging the closing order in court. The state would lose about $2 million in tax revenue every day the casinos were shut.

"It gives me no joy, no satisfaction, no sense of empowerment to do what I'm forced to do here," said Corzine, who is locked in a battle over taxes with his fellow Democrats who lead the state Assembly. Corzine wants to increase the sales tax from 6% to 7%.

According to the state constitution, New Jersey has no authority to spend money because there is no budget agreement for the fiscal year that began at 12:01 a.m. Saturday.

Corzine sees the tax 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.

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

No formal talks between Corzine and legislators were scheduled Saturday but Assembly Speaker Joseph Roberts Jr., a Democrat, called the Assembly Budget Committee back to the statehouse for a meeting at 10 a.m. today.

"Committee members should expect to work Sunday through Monday so we can bring a satisfactory end to this crisis," Roberts said.

Likewise, Senate President Richard J. Codey has ordered senators to the capital city for a noon Monday session that won't end until the crisis is resolved, said his spokeswoman, Jennifer Sciortino.

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. Road construction was suspended as of Saturday, but toll roads remained unaffected because they are not directly funded by the state budget.

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

"What's happening in the statehouse is shameful," said Assembly Minority Leader Alex DeCroce, a Republican.

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

The budget deadline of July 1 has been missed four times in five years, but the state has never gone past the morning of July 2 without an adopted budget. The shutdown lasts until an agreement is signed.

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