Ed Driscoll

The Mob That Whacked Jersey's Casinos

OK, let me get this straight: Jon Corzine, New Jersey’s governor, spots a revenue shortage and wants to raise sales taxes. If there’s a revenue shortage, why is he doing this?

New Jersey’s casinos ushered the last of the gamblers away from slot machines and tables Wednesday, and janitors locked the doors behind them as a state government shutdown claimed its latest victims.

In the first mass closure in the 28-year history of Atlantic City’s legalized gambling trade, all 12 casinos were under state orders to lock up.

Atlantic City’s casinos are lucrative for New Jersey. They have a $1.1 billion payroll, and the state takes an 8 percent cut – an estimated $1.3 million a day. But as a stalemate over the state budget entered its fifth day Wednesday with no deal in sight, even they had to shut down.

With no state budget, New Jersey can’t pay its state employees, meaning the casino inspectors who keep tabs on the money and whose presence is required at casinos are off the job.

State parks and beaches were also closed Wednesday because of the lack of staff.

“It’s like last call at a bar. It’s a little bit eerie,” said Michael Trager, 36, of Cincinnati, was playing a video poker machine at 10 minutes to 8 a.m. when an attendant told him to conclude his bet. “They said, ‘That’s it, you gotta cash out. We’re closing.'”

The doors to the Boardwalk side of Caesar’s were locked by janitors. An announcement came over the public address system telling gamblers the casino was closing.

“It’s history,” said Andy Trechock, 41, of Depford, as he stepped away from a slot machine at Bally’s Wild Wild West casino.

The problem started when the Legislature missed its July 1 constitutional deadline to pass the budget amid a fight with Gov. Jon S. Corzine over his proposed boost in the state sales tax.

Without a spending plan, Corzine ordered state offices shut down Saturday and all non-essential state government operations closed, and he furloughed more than half the state’s employees. Only about 36,000 people in vital roles such as child welfare, state police and mental hospitals remained on the job, and they were working without pay.

Corzine planned to address all 120 state lawmakers to discuss the impasse Wednesday morning.

The dispute between the governor and his fellow Democrats who control the Legislature centers on his plan to increase the state sales tax from 6 percent to 7 percent to help overcome a $4.5 billion budget deficit in his $31 billion spending plan. Experts say the proposal would cost the average New Jersey family $275 per year.

Atlantic City Police Chief John Mooney worried that the sudden evacuation of the casinos could lead to problems in the streets and to labor unrest. If the shutdown continues, casino workers who aren’t being paid could make trouble, he said.

“This is a state-created disaster,” Mooney said.

Indeed. In addition to payroll taxes, how much revenue is generated in sales taxes via goods sold in the casinos? How many goods and services are bought in the casinos and nearby shops by high rollers–and just everyday folks on vacation? What about the revenue from their hotel rooms?

And why do liberal politicians only spot revenue shortages that require tax hikes after they get into office? With the exception of Walter Mondale of course. Oh wait, that answers that question!

If you haven’t heard it yet, for some thoughts on how New Jersey got to this point, tune into my recent podcast with Steven Malanga, the author of the authoritative City Journal article, “The Mob That Whacked Jersey“.

Update: More here. In my podcast with Steven, we discussed New Jersey becoming increasingly like California, with its never-ending fiscal crises and spiraling taxes. Much of what Limbaugh discusses gives that impression as well.

Another Update: In a press release in Adobe Acrobat Format, Americans For Tax Reform notes:

The Garden State made national news over the weekend as the state government
officially shut down with no budget agreement reached by July 1 st . As a result, casinos, parks, beaches,
and Motor Vehicle Commission offices are closed. Although Gov. Corzine (D) today called the