What New Jersey Makes, the Government Takes

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New Jersey's six-day government shutdown has ended with the expected whimper: Legislators and Gov. Jon Corzine have reached a budget compromise designed to soften the blow of Corzine's proposed tax increase.

From his rogue fiefdom of Trenton, Corzine has been proposing to hike the state sales tax from 6 percent to 7 percent, arguing that the increase will help eliminate a $4.5 billion budget deficit. His fellow democrats in the state legislature, however, still bear the scars from Gov. Jim Florio's much more radical sales-and-income tax hikes in the early 1990s, which propelled Florio straight to Palookaville and set the stage for the rise of Christine Todd Whitman. Tax fans have rushed in to say toldja so, arguing that Whitman's rollback of the Florio tax is what got the Garden State into this jam. You'd have to be a real precious-metals believer to think that a tax cut enacted more than a decade ago, at a time when scientists claimed the Dow Jones Industrial Average would never top 3,000, explains a $4.5 billion shortfall in a $31 billion budget today. There are few people like that in the New Jersey assembly or state senate, and the impasse over the budget resulted in a shutdown of the state government late last week.

As Bill Clinton and Newt Gingrich discovered, the real danger in a government shutdown isn't the Hobbesian nightmare but the Emperor's New Clothes. Once the citizens get a sense of how little they miss the services Uncle Sam and Uncle Jon are providing, we may have a real revolution on our hands. But clever Jersey lawmakers built in a safeguard by not allowing casinos to operate without the state-employed inspectors who surely do a bang-up job of something or other. The $20 million hit to Atlantic City's casinos put pressure on Trenton to resolve the issue. According to reports, the compromise will allow the sales tax increase to go forward, but devote half of the revenue to offsetting property taxes for the next ten years—at which time somebody will be no doubt be arguing that if only Corzine had gotten to use all that tax money, New Jersey wouldn't be having so much trouble with its 2016 budget.

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  1. Do these government shutdowns simply result in paid vacation for the government employees who work in the closed offices, or are they actually out of work for those days and their paycheck reduced? Anyone know?

  2. What I don’t understand is why the casinos are under the Governor’s power to close. Also, what the hell good does that do, other than as a temper tantrum?

    Clarifications, anyone Over There?

  3. Okay, now that I’ve read the whole article, I get it. What a naked abuse of state power that was.

    You guys in Jersey need help circulating recall petitions for this goatfucker?

  4. They’re not under the government’s direct power to close. But there are state-employed inspectors in each casino (doing, as written, “something or other”) and, by law, they must be there for the casino to operate. When the government was shut down, these inspectors went home, so the casinos had to close.

  5. “Once the citizens get a sense of how little they miss the services Uncle Sam and Uncle Jon are providing, we may have a real revolution on our hands.”

    Actually, the reverse is true. If you want a real revolution, try stopping Social Security checks from going out. In fact, try delaying them for one day. For the past 25 years, Americans have voted over and over again for lower taxes and bigger government. And they’ve crushed anyone who tried to get in their way.

  6. Casinos cannot operate without Casino Regulatory agents (state employees) looking over their shoulders. Like Trump or Borgata would want to get a reputation for cheating gamers.

  7. These government shutdowns in the past have resulted in paid vacations for the state paid people. (I can’t bring myself to call them workers.) Everyone suspects they will get paid this time as well.

    Some silver lining: Auto registrations and driver licenses that would have expired in June now expire in July.

    And here I was just about to change my state tax withholdings to reflect the non-existence of my state.

  8. Do these government shutdowns simply result in paid vacation for the government employees who work in the closed offices, or are they actually out of work for those days and their paycheck reduced? Anyone know?

    I don’t know how NJ does it, but I knew a civilian employee with the Navy last time the Feds “shutdown” he was sent home for a couple of days. As soon as the budget deal was made all pay for the lost time was restored. So, yes, he got a paid vacation. I imagine Jersey will do the same.

    I’m sure I’m not the only one who thinks that we’ve seen the last of Jon Corzine at the national level.That has to be a good thing, doesn’t it?

  9. There was a government shutdown? I live in New Jersey and didn’t notice anything.

  10. What I don’t understand is why the casinos are under the Governor’s power to close.

    I know you got it, but just to clarify: state regulators are in under his control, not the casinos. It just so happens that we “need” state regulators for the Casinos to run.

  11. Well of course they get paid. If you noticed in the 90’s when they shut down the Fed. Gov for a few days they ended up paying them all, not that they didn’t get much more done than usual being at home versus work, but they still got paid.

    Meanwhile I did not receive any sort of pro-rating on my income taxes for those days on that weeks paycheck. Not that I could tell anything was different in the world during those days everything else went as normal because we have to do what we have to do. When all you do is wonder what to do with someone elses money you can take a few days off to ponder it, then you can spend it again since you still took the money those days you were off.

    What I am missing is how this sales tax increase is supposed to cover a budget deficit while at the same time offset property taxes? If your letting people keep the difference in sales tax on their property taxes don’t you end up with the same deficit amount in the end? How can you say you need more to take less to cover the expenses you origianlly claimed you needed more for to begin with.

    Shut all the governments down and those of us that work and take care of ourselves will never notice a difference, unless we get to keep our money. Only those sucking away on uncle sugars tits will feel anything and that is exactly what they need. They need to take care of themselves, since now no one else is forced to take care of them, that who four letter word politicians hate “personal accountability”.

    I wonder whom those not getting their free ride would revolt against anyway? The pol they elected because they were promised more money for the nothing they already do daily? perhaps they can call the entitlement offices and use the simple automated answering service to direct their bitching. Then again there shouldn’t be anyone at those agencies since they are all closed.

    This is why I think the only way to gain control back from government and make it VERY CLEAR that the party is over is through Income Tax. Every worked should claim 10 dependents all year and have as little removed from their payroll check as possible. Then on April 15th all the WORKERS of this country that finance all these bullshit projects give the IRS a collective fuck you.

    What would they do arrest the only people that work in the country and put them in jail? Who would pay for it and how much would they have to spend next year if all their workers are in jail? Jails that could hold that many people do not exist to begin with and building them costs money, money you need people working to make.

    Even if only 1/2 the workers did this collectively it would send the message and still be more than they could do a damn thing about. Something tells me 1/2 of the workers out there feel they are getting shafted w/o lube weekly. Hey if they do some how manage to come after us for Tax evasion we could just quick working all together, how profitable will that be for Uncle Sugar? haha Or better yet we could go to Mexico put on a sombrero and cross back with out hands out and wait for the freebies to roll in.

    Enough is enough and we are hitting critical mass as the money is truly running out, finally. So lets just get it over with now and help our politicians to collapse the whole damn thing and start over. After all its not a matter of if it will collapse just a matter of when!

  12. On the plus side, during the shutdown, there were no New Jersey officials at the Raritan Expo Center to discover whether or not the vendors had in fact obtained proper licensing (or were collecting sales taxes).

  13. There are so many Jerseyans in Reason’s ranks. What, we couldn’t get Gillespie or Cavanaugh to do this post?

  14. Oh, to be back in ol’ Jersey to hear what they’re saying about this on the Greatest. Radio. Station. Ever.

  15. Reminds me of a similar brouhaha a few years back over here in Ohio.
    They had to close the state parks to convince Joe and Josephine Sixpack that state government has any effect on their lives, other than an unpleasant one.

    Notice that they never turn off all the traffic signals.
    heh heh

  16. What I don’t understand is why the casinos didn’t operate, when there were no Casino Regulators to witness their operating illegally.

    And the best radio station ever IS in NJ, but at http://wfmu.org

  17. The best radio station ever used to be the student-run one broadcast from Seton Hall University.

    All metal.

    All.

    The.

    Time.

    That was the only thing I liked about Jersey.

    Well, that and the Aqua Teen Hunger Force reside there.

  18. The best radio station ever used to be the student-run one broadcast from Seton Hall University.

    All metal.

    All.

    The.

    Time.

    That was the only thing I liked about Jersey.

    Well, that and the Aqua Teen Hunger Force reside there.

  19. BTW: If Sinatra’s Left Nut had a snoodle-fight with Herrick And His Balls, who do you suppose would win?

    (Sorry, must be the antihistamines kicking in)…

  20. “As Bill Clinton and Newt Gingrich discovered, the real danger in a government shutdown isn’t the Hobbesian nightmare but the Emperor’s New Clothes.”

    Uh, no, not really. Newt Gringrich discovered that shutting down the government was a career-ending move for a politician. Bill Clinton discovered that having your opponents shut down the government is a godsend.

    True story: on the day the federal government shutdown began, Ann Landers ran a letter from a member of the Peace Corps, talking about the great work they do. Ann thoughtfully provided their information number. Curious, I dialed it, only to a hear a recording tell me that, because of the government shutdown, the Peace Corps was closed.

    Heh heh heh.

  21. That “Tax fans have rushed in to say toldja so” link is classic. Like any statist, they call tax cuts “costs” or “losses”” as if the money was being thrown into a bonfire. The best part, though, is that they show a chart in which the tax revenues go up from $15 billion to $24 billion in a decade and cite this as proof of the problem with tax cuts. In fact, they admit that the real problem is that spending continued to soar — but after admitting that, they pretend they didn’t say it at all, and go right back to blaming tax cuts.

    Also, I like how they attempt to prove that the tax cuts were a bad idea by showing that property taxes went up for most people by more than income taxes went down.

    First, although they imply one led to the other, there’s no connection between them; property taxes are municipal while income taxes are state. (Property taxes go up because we vote on school budgets (the primary use for property taxes) in special elections held at odd times when the only people who are organized enough to affect the elections are the teachers’ unions, so their continually-inflating budgets are always approved.)

    Second, they “proved” this by, essentially, assuming that everyone in the state pays the average property tax.

  22. I liked the part where the state of New Jersey promptly shut down the operations which actually generate positive cash flow for the state, like the lottery.

    If you’re in a cash crunch, the first thing you want to do is cut revenue while maintaining your expenses. Unless, of course, you think you might gain some sort of political advantage.

  23. This article expresses the author’s thoughts and feelings rich, to give the reader a different shock.

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