State Budget Spat Shuts New Jersey Casinos

The government of New Jersey has shut down because of a budget dispute between Gov. Jon Corzine and state legislators. The conflict has effectively closed the state's gambling resorts.

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MADELEINE BRAND, host:

In the casinos of Atlantic City, gaming floors are roped off, and the slot machines are silent. New Jersey missed its deadline to pass a budget on July 1st. On Saturday, Governor Jon Corzine ordered all non-essential state services to be shut down. That includes state parks, road construction, and state-employed casino inspectors. Governor Corzine spoke to the state legislature this morning. He defended the shutdown of services, saying his hands are tied by the state constitution.

Governor JON CORZINE (Democrat, New Jersey): It is deplorable that the people of this state are left in such a painful position, but I don't have the authority to simply ignore and keep certain things open just because it makes life easier.

BRAND: Life could get a lot harder for the thousands of casino employees thrown out of work by the closings today. Mike Pesca has been talking to people in Atlantic City, and he joins us now. Hi, Mike.

MIKE PESCA reporting:

Hi, Madeleine.

BRAND: You've been, I understand, at the boardwalk there in Atlantic City. What's the scene like?

PESCA: Well, it's morose, although we have to add that a Wednesday morning, there usually isn't that much activity, but it's a little off. And the dominant scene are people waiting to check out of their casinos and their hotels. Although the hotels remain open, without the gambling, no point in staying. That's why people booked, in some cases, weeklong trips to take advantage of the July 4th holiday. Waiting to check out a little bit early was Barbara Juba(ph) from Hazelwood, Pennsylvania. Here's what she says.

Ms. BARBARA JUBA (Vacationer in Atlantic City, New Jersey): Without the beaches, the gambling, what are you going to do? You know? I mean, how much can you walk the boardwalk?

PESCA: And if Juba and her friend didn't want to walk the boardwalk, they could've rolled along the boardwalk in one of those rolling chairs, but I talked to a guy named Zoltan Brier(ph). He's from Hungary and spends the summer here trying to hustle a buck. He has to rent the chairs from the supplier, and the supplier's not cutting his prices, so this is what Brier says he has to do.

Mr. ZOLTAN BRIER (Summer Resident of Atlantic City, New Jersey): I have to work every day, maybe longer. You know, average, I work 12 hours a day. But maybe tomorrow I should work 14 or 16 hours for the money.

PESCA: So that's the general sense. For a day or a half-day, people feel that perhaps they can weather it, but if it goes on much longer, it's really going to be cutting into the pocketbooks of the employees and all the businesses that have sprouted up around the casinos.

BRAND: Right, so they're losing money, but what about the state in general? They must be losing money, too.

PESCA: Yes, that's an interesting question. Here we have - here's why the casinos are shutting down. Obviously, everyone who works for the casinos isn't a state employee, but the casino inspectors, the gaming inspectors, are. They're the guys that make the whole enterprise legal. And every day, the casinos generate an estimated $1.25 or $1.3 million. You can compare how much they are giving to state coffers versus the salaries of the salaried employees for the state. Jon Corzine knows business. He knows the casinos actually give more money than they take. Take into account the lottery, a very popular thing in New Jersey. That generates over $2 million a day, and the salaries and the costs for those pling-pling-pling balls isn't as expensive as how much they're taking in. But I think - he says (a), there's nothing he could do. They're a non-essential state employee, but the symbolism is pretty striking. Everyone knows Atlantic City, and if you cut it down, he, I think, wants to make people understand how serious this is, wants to make them feel the state's pain.

BRAND: Well, what are his options now?

PESCA: He says he's emphasizing a 1 percent raise in sales tax. It can't be income tax, he says, because then the millionaires will just leave the state. So what about that 1 percent raise in sales tax? I talked to a woman named Helen Casey(ph). Here's her take.

Ms. HELEN CASEY (Resident, Atlantic City, New Jersey): It was Corzine had to make a stand, he had to back it up, and legislature, whatever. Six percent to 7 percent - I'm from New York, originally - 8 and a quarter The end of the world for a penny? What would have been the difference, if that's the only issue?

PESCA: And Corzine says it's that or a state shutdown.

BRAND: Thank you, Mike.

PESCA: You're welcome.

BRAND: DAY TO DAY's Mike Pesca, reporting from Atlantic City.

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