Budget in Assembly`s Hands--Update

The New Jersey Senate approved a $24.1 billion budget Tuesday that includes changes to Atlantic City casino taxes for the first time in 25 years.

Lawmakers agreed to keep working past the June 30 midnight deadline to approve a balanced budget, averting a state government shutdown. The budget now must be approved by the Assembly before it goes to Gov. James E. McGreevey for his signature.

Republicans, who held up the budget process until the final hours by refusing to vote for over $800 million in taxes and fees, blocked a tax on telephones and scaled back proposed fees on home sales.

The casino tax was one of the major points of contention in negotiations. Casino net profits take the biggest hit under the increased tax, but some fees for patrons also will go up. The tax is expected to raise $90 million.

The cigarette tax would increase by 55 cents, to $2.05 a pack, among the highest in the nation. Last year, lawmakers raised the tax by 70 cents a pack.

The new budget also cuts property tax rebates to homeowners by 50 percent, cutting the average check to $250 from $500.

McGreevey had warned of a government shutdown if no deal came by midnight Monday, the end of the state fiscal year and the constitutional deadline for a balanced budget. A government shutdown would halt nonessential state services and close parks and state offices.

With 20 members of each party in the Senate, McGreevey needed at least one Republican senator to vote for any budget bill. Democrats control the Assembly.

Many had expected an early day Monday, after a breakthrough Sunday where GOP senators offered to vote on at least six of the eight bills they had threatened to kill. McGreevey had sought to raise more than $800 million by taxing cigarettes, casinos, telephones and home sales.

The budget agreement pares those proposed taxes by about $200 million.

Although the compromise was reached in principle by 9 p.m. on Monday, negotiations continued until nearly 5 a.m. Tuesday over each line of the proposed budget.

This isn't the first time state lawmakers missed the midnight deadline to vote on the budget. Last year, an emergency session spilled into July 2 after lawmakers bickered over a change to the corporate business tax.

At least five other states -- California, Connecticut, Nevada, Oregon and Pennsylvania -- also faced a July 1 budget deadline.

Article continues below

---

advertisement

---

Author: Copyright 2003 by NBC 10. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.