Well, the governor went ahead and did it: New Jersey’s Jon Corzine, in an impasse with the legislature over his plan to raise the sales tax, has ordered the closure of Atlantic City’s casinos, which employ about 50,000 state residents this time of year. From Reuters:
Atlantic City casinos could lose more than $20 million a day in revenue and cut thousands of jobs, an industry executive said on Wednesday, as a New Jersey budget impasse forced operators to halt operations.
All 12 of the city’s casinos closed on Wednesday morning after a budget impasse led Gov. Jon Corzine to shut down non-essential services July 1, furloughing most state employees.
The casinos, which generate millions of dollars in taxes for New Jersey, must have state-employed regulators in place to operate. A state appellate court on Monday rejected a plea by casinos to stay open.
“It is a terrible thing for Atlantic City,” Trump Entertainment Resorts Inc. Chief Operating Officer Mark Juliano said. “For future investment it makes people think that there is not a government that is stable enough to administer their own policies.”
Corzine, who wants to raise sales tax one percentage point to 7 percent to close the state’s $4.5 billion budget deficit, said on Wednesday he did not have the authority to exempt casino regulators.
It has been a week of one step forward (the Borgata expansion), two steps back (the shutdown).
Regardless of the outcome of this game of legislative chicken, it’s unfortunate that the casino industry–and working men and women of South Jersey–have to suffer. Is it possible to recall a New Jersey governor or legislature? I think this kind of gross ineptitude is grounds for a recall.
It’s even more puzzling because the casino inspectors are not a drain on the state’s funds–the casinos provide them offices and completely pay for the costs of their own regulation. And by closing the casinos, in addition to cutting thousands out of their paychecks, the governor is kissing about $1.75 million in daily gaming tax revenue goodbye. This isn’t about money–it’s all about politics.
I’m in Atlantic City this morning, and I poked my head into a few of the casinos on my run down the boards this morning. Seeing them roped off and shut down is surreal.
And the timing–just when the city is just starting a small growth spurt–makes this whole thing especially disastrous. I wouldn’t be surprised if the rumored City Center East got put on hold, and at least one of the other planned projects dried up. It’s hard to fault Steve Wynn for leaving town when casino operators and employees have to contend with this kind of nonsense.
At least NJ Transit is still running–if the thunderstorms don’t disrupt air travel, I might make it back to Vegas by tomorrow, as planned.