NJ Shutdown: Day 6

The New York Times recognizes the NJ government shutdown as being an intraparty struggle for dominance of the state's Democratic party. Too bad that taxpayers are going to be screwed no matter who wins.

For what is lost in all this is that taxes aren't the problem. They're the symptom of the problem. The true problem is out of control state spending and Corzine and the Assembly Democrats are not addressing that core problem. Instead, they're looking at increasing the state sales and use tax to cover increased spending or to provide tax relief from other onerous state taxes (like real property taxes).

There's no progress in trying to figure out a state budget, which means that the casinos will continue to be shutdown. That's millions of dollars in business revenues permanently lost. That's $2 million in tax revenues lost per day.

So it is not without some irony that one of the alternative plans being floated would call for an increase in the state's taxes on casinos. That figures. Tax the cash cow that helps balance the state budget. The 12 casinos have undergone major expansions and renovations over the past few years, and the first new casino in more than a decade (the Borgata) was built only a few years ago. Millions flock to Atlantic City, but the shutdown may keep people away long after the casinos are finally reopened.

At least there's some movement in the Legislature to draft a bill that would make treat certain casino workers as essential state employees such that they'd enable the casinos to reopen.

This is effective governance, New Jersey style.

The thinks that the legislature has to compromise Bergen Recordwith the Governor. Well, that's a great idea, but considering that any and all compromises are going to contain significant tax increases and major increases in state spending, no budget is better than the flawed budget being proposed by both the Assembly Democrats and the Governor.

UPDATE:
Sorry, we're closed. What a great idea for a t-shirt. Now why didn't I think of it first. The full line of slogan items is here.

UPDATE:
Via anonymous emailer, the deal has been struck:

TRENTON, New Jersey (AP) -- New Jersey leaders agreed on a state budget Thursday following a six-day government shutdown that shuttered casinos and threw more than 80,000 people out of work, a high-ranking Statehouse official said.

Details will come later, but count on New Jersey taxpayers having to shoulder a higher burden for the privilege of calling themselves New Jersey residents.

Two sources said the compromise plan keeps intact Corzine’s sales tax hike for a decade, but calls for a 50 percent of the new revenues - an amount that would dedicated by a constitutional amendment - to be set aside to offset property taxes. In a nod to Roberts, the plan also leaves open the annual possibility of increasing that percentage dedicated to property tax relief, the sources said.

The full legislature is expected to consider the proposal later today or tomorrow.

So, the state got shut down for a massive tax hike along with a big hike in state spending. Lovely. Just lovely.

Technorati: corzine, new jersey, budget crisis, fiscal folly.