Tuesday, July 1, 2003 | 11:15 a.m.
SUN WIRE REPORTS
TRENTON, N.J. -- The Assembly narrowly approved a plan today to increases taxes on Atlantic City casinos, the most contentious measure needed to balance Gov. James E. McGreevey's $24.1 billion budget.
The house voted 41 to 37, sending the bill to the Senate for final approval. The Assembly continued its debate on several other tax bills, and quickly passed a new tax for billboards. Higher taxes for cigarettes and a vote on the budget itself was expected later today, after a midnight Monday deadline passed and a government shutdown was averted.
Lawmakers agreed Monday night to a $90 million tax plan for casinos, one of the major sticking points during budget negotiations. Casino net profits take the biggest hit, but some fees for patrons also will go up.
That deal ended a standoff by Senate Republicans, who refused to vote for any of the $800 million increases in taxes and fees McGreevey initially proposed.
Assemblyman Frank Blee, R-Absecon, urged lawmakers to simply leave casinos alone and let them generate more business, jobs and tax revenue.
"The dividends it would pay for each and every citizen of the state of New Jersey over the next few years would have been tremendous," Blee said.
Casinos promised to help pay for prescription drugs and senior benefits, but those costs have risen dramatically while the share of gambling revenue has not kept pace, said Assemblyman Louis D. Greenwald, D-Camden.
"We need the help from some of the largest partners in our state and we need their help for three years," Greenwald, the bill sponsor, said.
New Jersey state government remained open for business today and officials said it would continue as long as the Legislature keeps its marathon budget sessions alive.
The state Senate's budget committee met as today dawned and finally cleared bills to increase taxes on billboards, casinos and cigarettes, all pushing the overdue budget closer to a final vote. Legislative rules require the Assembly to act first on any tax or appropriations measure before it goes to the Senate.
During the negotiations Monday, Atlantic City's 11 gambling halls were making plans to close their doors at midnight, anticipating the cancellation of all non-essential government services.
But a judge late Monday ordered the state Casino Control Commission and state Division of Gaming Enforcement to keep their inspectors and other employees on the job, overseeing the safety of patrons, keeping watch over casino revenues and taking complaints from gamblers. However, an appeals court overturned that ruling.
The casinos, which employ about 48,000 people and win $4.3 billion annually from gamblers, are open 24 hours a day.
McGreevey's threat to order the shutdown of state services was about as welcome as a black cat in a baccarat pit, for it would have cost both the state and the casinos millions of dollars in lost gambling revenue.
Last July, for example, the Atlantic City casinos won about $13.5 million a day from gamblers.
The Casino Control Commission and Division of Gaming aren't funded by the state per se.
Casino taxes and fees finance the salaries and operations of the two agencies, but the money flows through the state budget. McGreevey's office has said casino regulators were not essential employees, and would not work in the event of a shutdown.
The casinos felt otherwise and persuaded Superior Court Judge George Seltzer to force them to stay on the job.
"Judge Seltzer's decision allows thousands and thousands of casino employees to continue working and earning their paychecks, recognizing that the passing of the state's budget has nothing to do with the funding of the (regulatory agencies) as all of their salaries and expenses are paid for by the casino industry, not the taxpayers," the Casino Association of New Jersey said in a statement.
But a state appeals court overturned the lower court ruling, allowing McGreevey to shut Atlantic City casinos later today should state legislators fail to pass a budget.
Only essential personnel are allowed to work if a budget isn't passed, and the governor doesn't consider casino inspectors essential, McGreevey spokeswoman Kathy Ellis said.
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