TRENTON, N.J. – New Jersey's government shutdown will come to an end in the next day or so after state lawmakers and Gov. Jon S. Corzine came to an agreement Thursday on a new state budget that will allow 80,000 furloughed workers to get back to their jobs.
The announcement came late Thursday when Corzine, Assembly Speaker Joseph Roberts Jr. and Senate President Richard J. Codey said they reached a deal to increase the sales tax by one penny and spend half of that cash on property tax relief.
"Half will be dedicated for property tax relief, and we will protect this money with a request for a constitutional amendment to dedicate these funds for that purpose," Corzine said of the pending sales tax hike from 6 percent to 7 percent.
"The other half will go toward balancing the budget with the absolute goal that if we restore fiscal integrity to the state budget in 2008 or beyond that this too can be dedicated toward property tax relief," Corzine said. The tax hike is expected to raise about $1.1 billion per year. Corzine pledged that at a minimum, the deal will provide $5 billion for property tax relief over the next 10 years.
The governor was forced to close state offices and other non-essential government operations on Saturday after the Legislature failed to pass a budget by a legally-mandated July 1 deadline. About 45,000 people across the state — from casino workers to park rangers — were put on unpaid leave, but essential employees like state police, who did have to come to work, also were not receiving paychecks during the six-day shutdown.
The closure of Atlantic City's 12 casinos — a necessity because state gambling inspectors could not monitor casino operations — cost the resorts about $16 million a day and put 36,000 casino employees out of work. It also cost the state about $1.3 million a day in taxes the casinos normally generate.
Hundreds of casino workers and state employees bussed into the state capital Thursday for a rally outside the Statehouse.
"The money is just dwindling down," said Cheryl Fogu, 50, of Brick, who works for the state attorney general's office. "They just don't realize what they're doing to us."
Corzine proposed the sales tax hike to make up for the state's $4.5 billion deficit. But it was stalled in the Legislature because the former Goldman-Sachs executive wanted to apply all of it to reducing the shortfall. Property taxes in New Jersey are the highest in the nation, and legislators were looking for some way to encourage future investment in the state.
The increase will cost the average New Jersey family about $275 each. Corzine warned that the budget deal was not cause for celebration.
"Far too many people's lives have been upset economically, emotionally. Workers' wages have been left, businesses' revenues diminished and basic public service interrupted. This absolutely must not happen again," Corzine said.
Codey added that the budget process is flawed and he wants to fix it.
"We want to make sure this never happens again, ever," he said.
No one is certain exactly when the casinos, horse tracks and state lottery machines will be reopened, but Senate Majority Leader Bernard F. Kenny and other lawmakers said the new budget could be passed on Friday or Saturday at the latest.
"Hopefully we'll get a budget passed this weekend," said Kenny, who was part of the meetings with the governor throughout the day.
"We're anxious to get back to work," said Bob Master, a director with the Communications Workers of America. He said their lawyer was meeting with administration officials and hoped to learn when state workers could return to their jobs.
Casino Control Commission chief Linda Kassekert said Wednesday it would take hours to get the operations running again. Dennis Drazin, who represents the New Jersey Thoroughbred Horsemen's Association, said he anticipated a quick restart at the Meadowlands and Monmouth Park race tracks, possibly even as early as Friday.
The new budget cut proposed spending increases by $2.5 billion, but at $31 billion, the 2007 fiscal year budget is still almost 10 percent higher than last year.
The tax hike and the shutdown did not sit well with many New Jersey voters. But the Democratic-controlled Legislature has a year to heal the wounds — the next state election isn't until 2007.
FOX News' Rick Leventhal and The Associated Press contributed to this report.