Corzine shuts down N.J. government

Budget dispute prompts order

July 02, 2006|By NEW YORK TIMES NEWS SERVICE

TRENTON, N.J. -- Gov. Jon Corzine signed an executive order yesterday shutting down the state's government, for the first time in its history. Horse racing at the state's tracks was called off, road construction projects were halted and about 45,000 of the state's 80,000 employees were put on furlough.

The order, a result of an impasse between the governor and the legislature over the budget for the new fiscal year, began a process in which the state, during the next few days, may close state parks, two state-run beaches and, depending on the outcome of a court case, the 12 Atlantic City casinos.

Essential operations, such as prisons, state police, child protection services and psychiatric hospitals, continued to run.

But some effects were felt almost immediately. Operations of the Department of Motor Vehicles were suspended when offices around the state closed at noon yesterday. Courts were to stop all but emergency operations.

And the New Jersey Lottery, with $2 billion in annual sales - the state's fourth-largest source of revenue after taxes on income, sales and corporations - was ordered to stop selling tickets last night.

The holiday weekend cushioned the effects of the executive order on New Jersey residents. But because the shutdown was unprecedented, it carried symbolic weight.

"It gives me no joy, no satisfaction, no sense of empowerment to do what I am forced to do," Corzine said. "We will do everything we can to bring this to a short conclusion."

Through the order, Corzine imposed the Disaster Control Act and declared a state of emergency in New Jersey. The act grants the governor a set of extraordinary powers, including the ability to call up the National Guard, if necessary.

The status of the 12 casinos remained unclear. Lawyers for the casinos went to a state appeals court Friday seeking a ruling that would allow them to remain open. But the court said it could not consider the request until after Corzine issued a shutdown order. The court was expected to take up the matter after Corzine signed the order.

Stuart Rabner, the governor's chief counsel, said that if a judge upheld Corzine's request, casinos - which take in about $13 million a day - could be closed as soon as the morning after the issuance of a ruling.

Corzine, a Democrat in his first year as governor, said that he felt compelled to sign the order after he and the Democratic-controlled legislature could not reach agreement on his proposal to help balance the budget by raising the sales tax to 7 percent from 6 percent.

The governor has argued that the sales tax increase is needed to close a deficit of about $4.5 billion in the state's $31 billion budget. But a group of legislators, led by Assembly Speaker Joseph J. Roberts Jr., opposed the new tax, arguing that the deficit could be closed by cutting spending and expanding taxes.

Corzine said that he looked forward to resuming face-to-face negotiations on the budget today.

Earlier in the week, a legislator broke up a shoving match at a committee meeting, and Corzine ordered a cot for his office, which his aides said demonstrated his resolve to stay at the Statehouse until he had a deal.

Negotiations continued, in an effort to meet a midnight deadline Friday, when the 2006 fiscal year ended. Corzine said yesterday that talks had broken down between him and Roberts, though the sides had agreed on all but about $1 billion in spending cuts and revenue increases. Corzine has said he believes the increase in the sales tax would generate about $1.1 billion.

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