Atlantic City’s casinos began to close this morning as the budget crisis in New Jersey continues. This is the first time the casinos have closed in the state since gambling was legalized 28 years ago.
Governor Jon Corzine shut down most of the state government on Thursday, July 1st, over a dispute with fellow Democrats in the Assembly over a plan to increase sales tax. This order has stopped road construction projects and left tens of thousands of state workers on hold until an agreement can be reached.
The state’s constitution requires a balanced budget by July 1. This deadline has been missed four times in the past five years. Corzine’s plan includes raising the sales tax from six percent to seven percent to help close a $4.5 billion budget deficit. The Governor views this tax increase as a necessary step toward creating adequate annual revenue, but many Democrats in the Assembly, the lower house of the state Legislature, and several Senate Democrats believe the plan is overzealous. Other plans include eliminating property tax deductions for those earning more than $200,000 annually and applying the sales tax to seasonal rental properties.
In years past, a budget was adopted whether it was balanced or not. Without an approved budget, the state has no authority to spend money on non-essential state government operations. This includes the salaries of casino inspectors who are required to be in the facilities at all times.
Atlantic City’s 12 casinos have a $1.1 billion payroll; the state’s eight percent cut roughly equals an estimated $1.3 million every day. Atlantic City police are concerned that labor unrest amongst the 15-30,000 temporarily unemployed casino workers could lead to trouble in the streets and an increase in crime.
State-run parks, beaches, and historic sites are also expected to close today. The state police, mental hospitals, and child welfare services are to continue operating. Until the government shutdown ends, the 36,000 people in these crucial roles will not be paid.