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{{Short description|First shutdown in the history of the U.S. state of New Jersey}}
{{Use mdy dates|date=March 2012}}
{{good article}}
[[Image:Ballys closed.jpg|thumb|right|300px|[[Bally's Atlantic City]], a casino, was closed during the government shutdown.|alt=A roped off entrance to room with a neon sign "CASINO", over a sign saying "CASINO A... CLOSED". The room contains many slot machines. Nobody is in the room.]]
The '''2006 New Jersey
The shutdown officially concluded after the legislature adopted a budget on July 8, 2006. All government services were restored by 8:30
New Jersey would not have another shutdown until July 1, 2017, when the [[2017 New Jersey state government shutdown|government shut down]] after failing to pass a budget before the midnight deadline.<ref>{{cite news |author1=Matt Arco |author2=Claude Brodesser-Akner |publisher=[[NJ.com]] |title=Christie shuts down state government |url=http://www.nj.com/politics/index.ssf/2017/07/christie_orders_shutdown_of_non-essetial_nj_govern.html}}</ref> The shutdown ended on July 3, 2017.<ref>{{cite news |author=Matt Arco |date=July 3, 2017 |title=It's a done deal: Christie will end state shutdown in time for July 4, sources say |publisher=[[NJ.com]] |url=http://www.nj.com/politics/index.ssf/2017/07/christie_likely_to_approve_deal_to_end_shutdown_so.html}}</ref>
== Background ==
During the [[New Jersey gubernatorial election, 2005|2005 gubernatorial election]] Corzine, a former executive at [[Goldman Sachs]], claimed he was "not encumbered by an old culture, historical entanglements and the status quo" and had a plan to use his experience to overhaul the budget process and trim spending.<ref>{{cite news|url=
The President of the [[New Jersey Senate]], former Governor [[Richard Codey]], had stated his support for Corzine's budget including the tax increase. The stalemate in the negotiations had been with the [[New Jersey General Assembly]], whose
The [[New Jersey State Constitution]], under Article VIII, Section II, paragraph 2, requires that the state's expenses for "as far as can be ascertained or reasonably foreseen" (i.e., the [[fiscal year]]) be provided for in a single budget act.<ref name="njsc">{{cite web|url=
In three of the previous five years, the legislature had failed to meet the June 30 deadline.<ref name="nyt2">{{cite news|url=
== Causes ==
[[Image:SenatorJonCorzine.jpg|right|thumb|Governor Jon Corzine [Picture taken during his term as U.S. Senator]|alt=Head and shoulders of a man in his mid-fifties, seated with hands clasped. He is Caucasian and wears glasses and a black suit with a white dress shirt and a red tie. His head is balding and he has a gray beard with traces of brown hair. A U.S. flag is in the background.]]
Corzine, in attempting to pass his conceptual budget, came into conflict with fellow [[New Jersey Democratic Party|state Democrats]] in the [[New Jersey General Assembly]], particularly over their refusal to implement his proposed increase of the state's sales tax from 6% to 7%<ref>{{cite news | url=http://www.nj.com/news/jjournal/index.ssf?/base/news-1/1151649105285280.xml&coll=3 | title=Corzine: Lack of deal will halt lottery, close Liberty State Park| newspaper=[[Jersey Journal]] | date=June 30, 2006|
== The shutdown ==
After the legislature failed to pass a budget by midnight July 1 when the old budget ended, the governor signed [[Executive order (United States)|executive order]] number 17<ref>{{cite press release
State functions that ceased immediately included the [[New Jersey Lottery]] (the interstate [[Mega Millions]] game continued although players temporarily could not buy tickets in [[New Jersey]]), the [[New Jersey Department of Transportation|New Jersey Motor Vehicle Commission]], MVC offices and inspection stations, the [[New Jersey Department of Education]] and parts of the New Jersey Judiciary.<ref>{{cite
Later (post-July 4) shutdowns included [[Jersey shore|state beaches]], [[List of New Jersey state parks|public parks
According to ''[[The Philadelphia Inquirer]]'', "[[New Jersey Transit]], prisons, [[New Jersey State Police|state police]], developmental centers, veterans' homes, mental hospitals, health and disease-prevention offices, child welfare, work on transportation safety, response to environmental contamination, [and] inspectors of amusement parks" were not affected by the order to shut down.<ref>{{cite news
== Post-shutdown governmental action ==
To restore government services, on July 3, 2006, Corzine signed an executive order calling for an unprecedented [[Independence Day (United States)|Independence Day]] session of the General Assembly to work on presenting him with a budget.<ref>{{cite press release | url=http://www.state.nj.us/governor/news/news/2006/approved/20060703.html | title=Governor Signs Executive Order Calling For A Special Legislative Session | date=July 3, 2006 | publisher=[[State of New Jersey]]|
Meeting on the third day of the special session, Democratic factions within the General Assembly reached a compromise budget. That tentative budget proposed an increase in the state sales tax from 6% to 7%, which was estimated to generate an additional $1.1 billion in revenue. The plan also included a requirement to use half of that for direct relief toward New Jersey's [[property tax]]—highest of all states. The plan also called for the same dedicated purpose for all of the money raised by this sales tax increase in subsequent years. The new budget law included a provision for a constitutional amendment which was required, like all such amendments in the state, to be approved in an [[Election Day (United States)|Election Day]] [[referendum]].<ref name=WNBC>{{cite
Early in the morning of July 8, 2006, both houses of the legislature passed the proposed budget. At 6:00
Corzine used his [[line-item veto]] authority to reduce the budget by over $51.3 million by eliminating or reducing over 50 spending items.<ref>{{cite press release
== Effects ==
During the casino shutdown, 36,000 casino workers were given leave. The shutdown of casinos resulted in lost revenue for the state, as an estimated $1.3 million per day was collected in gambling taxes plus an additional $2 million per day due to the closure of the lottery system.<ref name=WNBC/> However, the sum of revenue not collected during the shutdown from gambling amounted to just a small fraction of the state's annual budget. Atlantic City's 12 casinos suffered losses estimated at $16–20 million per day during the shutdown.<ref name=PittPost>{{cite news | last=Barnes | first=Tom | authorlink=Tom Barnes (American journalist)|date=July 7, 2006 | url=http://www.post-gazette.com/pg/06188/704034-84.stm | title=N.J. budget deal reopens its casinos | newspaper=[[Pittsburgh Post-Gazette]] |
All [[driver's license]]s and [[vehicle registration]]s that were to expire at the end of July were extended one month.<ref>{{cite web
The increase in the rate of the state sales tax from 6% to 7% took effect on July 15, 2006, and also increased the sales tax rate in the state's [[Urban Enterprise Zone]]s (UEZs) from 3% to 3.5%.<ref>{{cite news |first=Evelyn |last=Lee |title=State revises system governing revenue of UEZs |url=http://www.njbiz.com/article.asp?aID=79000 |newspaper=NJBiz
The budget also included changes to products and services that are subject to the sales tax, effective October 1, 2006. The newly taxable items included downloaded music, ringtones, movies and books; shipping and handling; drapery and carpet dry cleaning; floor installation; contracted landscaping; self-storage; tanning; massages; tattooing; magazines; investigation and security services such as armored cars and alarm systems; limousines, except for those used in funerals; memberships in health, athletic and shopping clubs; and parking, except for employee parking, parking at municipal meters and parking already subject to municipal parking taxes.<ref>{{cite news | url=http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-3/1152939100301940.xml&coll=1 | title=Some advice on effects tax hike will have on goods and services | newspaper=[[The Star-Ledger]] | date=July 15, 2006|
Other immediate tax increases in the budget included an increase in the cigarette tax by $0.175 per pack; a 0.4% surcharge on automobile purchases of over $45,000.00 and on vehicles with an average combined city highway [[miles per gallon]] 19 or less; a new 6% tax on [[fur clothing]];<ref>{{cite web
These additional revenues were expected, when combined with spending cuts including a reduction of $200 million in
==Political influences==
Corzine's shutdown of state government had some effect on New Jersey and national politics. According to Clay F. Richards, assistant director of a poll by the [[Quinnipiac University Polling Institute]], Corzine had a 44% approval rating, his highest since January 2006. The poll also indicated that 71% of respondents disapproved of the legislature's handling of its job. According to Richards, "New Jersey voters clearly blame the state legislature for the budget crisis, and say the property-tax relief that the legislature insisted on in the compromise is more politics than real reform."<ref name="QUPoll">
There was also speculation that the [[New Jersey United States Senate election, 2006|U.S. Senate race]], already seen as tight, would be affected.
According to Peter Woolley, director of [[Fairleigh Dickinson University]]'s [[Fairleigh Dickinson University#PublicMind|PublicMind]] poll, the situation of the election was similar to the 1990 election, when underdog Senate candidate [[Christine Todd Whitman|Christie Whitman]], a Republican, nearly defeated well-known Senator [[Bill Bradley]] due to Democratic Governor [[Jim Florio]]'s sales- and income-tax increases.<ref name="race">{{cite web | last=Pollowitz | first=Greg | url=http://sixers.nationalreview.com/post/?q=YzAyZGRjYWVmNDg0NWVjNWJiZGU4ZGE0YjI3ZDM1M2I= | title=Corzine the albatross
==References==
{{U.S. government shutdowns}}
▲{{reflist|2}}
▲[[Category:Government finances in the United States]]
[[Category:Government of New Jersey]]
[[Category:Tax reform in the United States]]
[[Category:2006 in American politics]]
[[Category:2006 in New Jersey]]
[[Category:2006 government budgets|New Jersey state government shutdown]]
[[Category:Government shutdowns in the United States]]
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