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All Bets Are Off in N.J. Budget Crisis

Atlantic City casinos are shut as state furloughs cash inspectors, other nonessential workers. Governor, Legislature clash over tax hike.

July 06, 2006|Ellen Barry and Jenny Jarvie | Times Staff Writers

ATLANTIC CITY, N.J. — For 28 years, whether it was day or night, the lights kept twinkling inside the casinos here. All that changed Wednesday when the city's 12 gambling palaces were closed because the state could no longer pay the inspectors who monitor cash.

As 8 a.m. approached, gamblers began striding out of hotels with their suitcases. Coin hoppers fell silent and "out of order" messages blinked on slot machine screens.

Blair Jones, 83, who rose at 5 a.m. to play blackjack, watched out of the corner of his eye as security personnel and state police filtered into the building. "Let me put it this way," he said. "Like the Gestapo."

He was still feeling grouchy at midafternoon as he sat on a bench on the boardwalk, listening to waves crash on the beach behind him. "I've been sitting here all day, trying to figure it out," said Jones, a retired police chief from Uniontown, Pa., who spends a week in Atlantic City every summer. "I just can't imagine things like this happen in America."

The closing of New Jersey's casinos is the latest, most dramatic result of a dispute between Gov. Jon Corzine and his fellow Democrats in the Legislature, who oppose his plan to increase the state sales tax from 6% to 7%.

Corzine has urged the increase to help close New Jersey's $4.5-billion budget gap; legislators fear a backlash among voters and would prefer to increase property or income taxes.

When the lawmakers failed to agree on a budget by the Saturday deadline, Corzine ordered nonessential state services shut down.

On Monday, road construction projects and lottery ticket sales were halted, and courts and motor vehicle offices did not open for business. But it was Wednesday's closures -- of state parks, beaches, race tracks and casinos -- that stunned people.

Last July was the highest-grossing month in the history of Atlantic City casinos. Together, the 12 establishments generated $16.3 million a day in gaming revenue and $1.3 million a day in state taxes, said Daniel Heneghan, spokesman for New Jersey's Casino Control Commission.

But things looked different Wednesday.

"It's as if it's the middle of winter and there's a blizzard outside," said Mark Juliano, chief operating officer of Trump Entertainment Resorts Inc., who said the occupancy rate at the company's three Atlantic City hotels had dropped from 95% to 50%; about one-third of the hotel's 7,500 employees were told not to report for work.

"To lose a day in July is like losing five days in January," he said.

Juliano estimated that the Trump properties would lose about $4 million a day in revenue. "It's been a colossal failure on the part of government here," he said. "Whose fault it is, I don't know."

Gambling has been legal in Atlantic City since 1978, when officials here embraced casinos as a path out of poverty and urban decay.

The city's casinos -- one styled to resemble an Aztec pyramid, one with the towering columns of Roman temple, one like a Mississippi River steamboat -- now line the old-fashioned boardwalk and employ 46,000 people.

Cocktail servers and bar runners who arrived for the sunrise shift were told they were not needed, said Chris Walker, staff director of Unite Here Local 54, which represents casino workers.

Walker said food servers, housekeepers and cooks would likely be laid off if the impasse continued.

"Without the casinos, everything in this city stands still," said Robert McDevitt, the union's president, at a news conference also attended by bellmen, porters, cashiers, cocktail servers, chefs, housekeepers and janitors.

McDevitt said 6,000 union members were out of work Wednesday -- more than twice the number he expected.

At a joint session of the Legislature on Wednesday, Corzine urged lawmakers to pass his budget or propose a reasonable compromise. So far, he said, the alternatives presented to him have been untested, "highly speculative or known to be economically depressive."

Corzine said the dispute emerged out of two conflicting approaches to the state's finances: one based on a "political platform to seek reelection" and one that lays out "an honest and real way of paying" for priority programs. He went on to say that shutting down the government was not optional, but "a legal requirement imposed on the office of the governor by the Constitution."

"The people of New Jersey have every right to be angry," he said. "The people of New Jersey have every right to demand that the Assembly and the Senate and the governor act responsibly for the future of our state. I remain prepared to do my part. My door is open. It's long past time to act."

Meanwhile, Atlantic City had an end-of-summer quiet to it. State police were standing guard inside the glass doors of Caesars, keeping pedestrians from strolling into the casino.

Visitors packed and left, or found alternative amusements, such as shopping. Todd Katz, 46, sat outside the lobby, with its flaming torches, artificial palms and 25-foot statue of Caesar Augustus.

"It feels like the aftermath of an atomic bomb," he said. "It's desolate."

On the boardwalk, seagulls were assertive and crowds were thin. Eric Shepherd sat eating popcorn in the quaint, canopied "roller chair" that he usually pedals up and down the boardwalk, carrying tourists. To his right and to his left he could see a line of wicker roller chairs also at rest.

"People are getting on buses and getting out of here," he said.

*

Barry reported from Atlantic City and Jarvie from Atlanta.

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