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N.J. Lawmakers Reject Budget Compromise Plan

July 05, 2006|From the Associated Press

TRENTON, N.J. — Legislators opposed to Gov. Jon Corzine's proposal to raise the state sales tax rejected a compromise sought by the governor Tuesday and began devising their own budget plan, which might involve an income tax increase.

Corzine ordered lawmakers in to work on the Fourth of July holiday, imploring them to end a budget standoff that has shut down many government services. Atlantic City casinos fought to keep from being dragged into the dispute.

Members of the state Assembly budget panel planned to spend the night crafting a new plan, said Speaker Joseph Roberts Jr.

The governor's proposal to raise the sales tax from 6% to 7% would cost the average New Jersey family $275 per year, according to experts. Corzine opposes an income tax hike.

Tuesday's special session came three days after Corzine started shutting down state services because lawmakers missed the July 1 constitutional deadline to approve a new budget. Without a budget, the government can't spend money.

"Make no mistake, people are being hurt, and unfortunately more will be hurt in the days ahead," the governor told lawmakers.

The lottery, road construction, motor vehicle offices, vehicle inspection stations and courts already have closed. More than half of the state work force -- 45,000 people -- was ordered to stay home Monday. Lost lottery ticket sales are costing the state $2.2 million per day, treasury officials said.

If no deal is reached, state parks and historic sites will be closed today along with Atlantic City casinos, which are required to have state regulators on duty.

It would be the first time casinos have been forced to close. Since Resorts opened in 1978 as New Jersey's first casino-hotel, they have always kept the doors open, even if it meant shoveling snow or putting CEOs to work flipping burgers during labor strikes.

Casino operators, whose arguments were rejected by the state Supreme Court in one effort to avoid the budget crunch, lost in a lower court Tuesday after asking to avoid being shut down as a side effect of the state's problems. An appeal was planned.

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