New Jersey Lawmakers
Reach Budget Deal
By DAVID W. CHEN and
JOHN HOLUSHA, NYTimes on the Web, July 6, 2006
TRENTON -- An agreement to
break the state budget deadlock and raise the sales tax to 7 percent, from 6
percent, was reached today, Gov. Jon S. Corzine announced late this afternoon in
a news conference with the president of the State Senate and the speaker of the
General Assembly.
Half the revenue raised by the increase in the sales tax will go to close the
$4.5 billion gap in the state's operating budget. The other half will be
subject to a ballot question on whether it should be used for municipal aid to
reduce or slow the rise of property taxes. In 2008, another public
referendum will ask whether all the revenue from the tax should be used to
reduce New Jersey property taxes, which are among the highest in the nation.
The agreement paves the way to end the shutdown of state government after six
days and to permit the reopening of revenue-generating casinos in Atlantic City.
Mr. Corzine said he hoped that the details of the budget legislation could be
taken care of in the next 24 to 36 hours.
"While we are understandably encouraged by this agreement, this is not a time
for celebration or elation," Mr. Corzine said in the news conference. "Far
too many people's lives have been disrupted economically and emotionally.
Workers' wages have been lost, businesses' revenues diminished and basic public
services interrupted. This absolutely must not happen again."
The agreement came after a day of maneuvering in the capital on the sixth day of
a shutdown of state government because of the lack of a budget.
The break in the deadlock came in the afternoon when a group of Democrats in the
Assembly who opposed the tax increase broke apart.
A top Democratic senator said today that a bloc of legislators opposed to
Governor Corzine's proposed sales tax increase "broke up" and that an agreement
on the state budget could be announced as early as this afternoon.
Senator Bernard F. Kenny, the majority leader, said the bloc, led by Assembly
Speaker Joseph J. Roberts Jr., did not have enough votes to pass its own
proposal in the Assembly or to override a veto by Mr. Corzine. The
proposal was advanced Wednesday night and did not include a sales-tax increase
as does Mr. Corzine's plan.
"The Assembly Democratic caucus broke up," Mr. Kenny said after emerging from a
meeting in the governor's office, with Mr. Corzine, Mr. Roberts, Senate
President Richard J. Codey and others. "The votes weren't there."
Mr. Roberts, a Democrat from Camden, had been the principal opponent of Mr.
Corzine's plan to raise the sales tax to 7 percent.
The outlines of the deal came after Mr. Corzine called the Legislature into
joint session for the third consecutive day to appeal for a settlement of the
budget dispute.
Speaking this morning as idled state and casino workers demonstrated outside,
Mr. Corzine said, "We need to sit together and fix this mess."
Showing more emotion than usual, Mr. Corzine repeatedly said the Legislature
needed to act "today, today, today." He received a standing ovation from
the public gallery, but the legislators voted to adjourn shortly after he left
the chamber.
Referring to the state's worsening financial position, he quoted his father as
saying, "If you're trying to get out of a hole, stop digging."
Mr. Codey noted that New Jersey's reputation had taken some hits during the
government shutdown. "I honestly think in the end with the agreement that
we have reached, our state and more importantly our citizens are all emerging as
winners," Mr. Codey said at the news conference.
He also thanked Mr. Roberts. "Without his leadership, frankly, we would
not have an agreement that addresses property tax relief," Mr. Codey said.
For his part, Mr. Roberts said he was pleased with the outcome and acknowledged
Governor Corzine. "I am gratified that property tax payers will be among
the big beneficiaries of the resolution of this budget impasse," Mr. Roberts
said.
"I also want to salute Governor Corzine," the speaker added. "From the day
he presented his budget address, as he has worked throughout this entire
process, his commitment to this being a responsibly balanced, honest budget has
really made us focus on doing our job in a way that I think has achieved a very,
very good result."
David W. Chen reported from Trenton for this article and John
Holusha reported from New York. Richard G. Jones contributed reporting from
Trenton, and Carla Baranauckas contributed from New York.
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