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First Time in History: Corzine Orders New Jersey Government Shutdown

Richard G. Jones

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er on Saturday (July 1, 2006) 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 roughly 45,000 of the state's 80,000 employees were put on furlough.

Photo: Gov. Jon S. Corzine of New Jersey, left, with Stuart Rabner, his chief counsel, announced a shutdown of the state government Saturday. (Jackie Schear / AP)

The order, a result of an impasse between the governor and the State Legislature over the budget for the new fiscal year, began a process in which the state, over 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, like the prisons, the state police, child protection services and mental 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 on Saturday. 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 Saturday 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," Mr. Corzine said. "We will do everything we can to bring this to a short conclusion."

The status of the casinos remained unclear. Lawyers representing the casinos had gone to a state appellate court on Friday seeking a ruling that would allow them to remain open. But the court said that it had no jurisdiction to consider the request until after Mr. Corzine issued a shutdown order. The court was expected to take up the matter after Mr. Corzine signed the order.

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

Mr. 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 roughly $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 existing taxes.

And even in New Jersey, where politics can be a contact sport, the body blows that accompanied the budget debate have been noteworthy. Earlier in the week, a legislator had to break up a shoving match during a committee meeting and Mr. Corzine, in a bit of gamesmanship, ordered a cot for his office, in a maneuver that aides said demonstrated his resolve to stay at the State House until he had a budget deal.

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

New Jersey had missed the June 30 budget deadline three times in the past five years, but no governor had ever ordered a shutdown, according to the state's Office of Legislative Services, the research arm of the Legislature.

"New Jersey has experienced budget delays before," said David P. Rebovich, managing director of the Rider University Institute for New Jersey Politics. "But never a shutdown."

"There may be political consequences," he added.

Watching the fighting between the governor and his fellow Democrats in the legislative leadership, Republican lawmakers, who oppose the sales tax increase, have seized on the issue.

"The Democrats that run the Legislature had 101 days to enact the governor's proposed budget, modify the budget that was provided to them, or propose one of their own," said a Republican state senator from Sussex County, Robert E. Littell, who was referring to the number of days since Mr. Corzine's budget address on March 21. "Yet they have done neither. Instead, they have subjected the people of New Jersey to a State House version of the Mad Hatter's tea party."

On Friday night, about two hours before the deadline, Speaker Roberts appealed to Mr. Corzine to abandon his plan to order the shutdown. He compared the prospect of a shutdown to legislators' having "a gun placed to our head."

"We urge this governor to retreat from the precipice and not push the state over the edge into the uncharted waters of a government shutdown," Mr. Roberts said.

Mr. Roberts was so opposed to the governor's plan to help balance the budget with a sales tax increase that he and other legislators took the rare step of proposing an alternative budget earlier in the week.

But Mr. Corzine, who had said that he would veto any budget that did not provide revenues to match expenses, called the proposals unworkable.

"We have worked toward one goal: ending the fiscal games, gimmicks and mounting debt and, instead, securing the future for our children by restoring honesty and accountability to our state's budget," the governor said. "So far, our efforts have not resulted in the sort of responsible financial plan that the public has every right to expect from us. We have taken every reasonable and responsible measure to ensure that this day wouldn't come."

Aides to the governor said the shutdown would gradually take effect over the next few days. Although state offices might close immediately, the closing of state parks and beaches would probably not be completed until July 5 — to allow beachgoers to enjoy their Independence Day vacation plans.

"This is not a shutdown that will take place like that, in an hour," Mr. Rabner, the counsel, said, snapping his fingers.

The order affects 42 state-run parks and two beaches — Cheesequake and Island Beach State Parks.

Through the order, Mr. 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 members of the New Jersey National Guard, if necessary.

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

"While it is unfortunate that posturing of the past few days makes dialogue more difficult than need be," he said, "I truly have faith that the good will of the people involved and an appropriate sense of responsibility to the greater public good in the process will bring this stalemate to the swiftest possible resolution."